Correlation Between Bms Birlesik and Izmir Demir

Can any of the company-specific risk be diversified away by investing in both Bms Birlesik and Izmir Demir at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bms Birlesik and Izmir Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bms Birlesik Metal and Izmir Demir Celik, you can compare the effects of market volatilities on Bms Birlesik and Izmir Demir and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bms Birlesik with a short position of Izmir Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bms Birlesik and Izmir Demir.

Diversification Opportunities for Bms Birlesik and Izmir Demir

0.1

Correlation Coefficient

Bms Birlesik  Izmir Demir

Average diversification

The 3 months correlation between Bms and Izmir is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bms Birlesik Metal and Izmir Demir Celik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Izmir Demir Celik and Bms Birlesik is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bms Birlesik Metal are associated (or correlated) with Izmir Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Izmir Demir Celik has no effect on the direction of Bms Birlesik i.e., Bms Birlesik and Izmir Demir go up and down completely randomly.

Pair Corralation between Bms Birlesik and Izmir Demir

Assuming the 90 days trading horizon Bms Birlesik Metal is expected to generate 1.22 times more return on investment than Izmir Demir. However, Bms Birlesik is 1.22 times more volatile than Izmir Demir Celik. It trades about 0.16 of its potential returns per unit of risk. Izmir Demir Celik is currently generating about 0.01 per unit of risk. If you would invest  2,333  in Bms Birlesik Metal on September 14, 2024 and sell it today you would earn a total of  645.00  from holding Bms Birlesik Metal or generate 27.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Bms Birlesik Metal  vs.  Izmir Demir Celik

Bms Birlesik Metal

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bms Birlesik Metal are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bms Birlesik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Izmir Demir Celik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Izmir Demir Celik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Izmir Demir is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bms Birlesik and Izmir Demir

The main advantage of trading using opposite Bms Birlesik and Izmir Demir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bms Birlesik position performs unexpectedly, Izmir Demir can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Izmir Demir will offset losses from the drop in Izmir Demir's long position.

The idea behind Bms Birlesik Metal and Izmir Demir Celik pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.