Correlation Between Burcelik Vana and Ekiz Kimya

Can any of the company-specific risk be diversified away by investing in both Burcelik Vana and Ekiz Kimya 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 Burcelik Vana and Ekiz Kimya into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Burcelik Vana Sanayi and Ekiz Kimya Sanayi, you can compare the effects of market volatilities on Burcelik Vana and Ekiz Kimya 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 Burcelik Vana with a short position of Ekiz Kimya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burcelik Vana and Ekiz Kimya.

Diversification Opportunities for Burcelik Vana and Ekiz Kimya

-0.24

Correlation Coefficient

Burcelik Vana  Ekiz Kimya

Very good diversification

The 3 months correlation between Burcelik and Ekiz is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Burcelik Vana Sanayi and Ekiz Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekiz Kimya Sanayi and Burcelik Vana 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 Burcelik Vana Sanayi are associated (or correlated) with Ekiz Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekiz Kimya Sanayi has no effect on the direction of Burcelik Vana i.e., Burcelik Vana and Ekiz Kimya go up and down completely randomly.

Pair Corralation between Burcelik Vana and Ekiz Kimya

Assuming the 90 days trading horizon Burcelik Vana Sanayi is expected to under-perform the Ekiz Kimya. In addition to that, Burcelik Vana is 1.32 times more volatile than Ekiz Kimya Sanayi. It trades about -0.07 of its total potential returns per unit of risk. Ekiz Kimya Sanayi is currently generating about -0.05 per unit of volatility. If you would invest  6,455  in Ekiz Kimya Sanayi on September 22, 2024 and sell it today you would lose (620.00) from holding Ekiz Kimya Sanayi or give up 9.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Burcelik Vana Sanayi  vs.  Ekiz Kimya Sanayi

Burcelik Vana Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Burcelik Vana Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Ekiz Kimya Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekiz Kimya Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Burcelik Vana and Ekiz Kimya

The main advantage of trading using opposite Burcelik Vana and Ekiz Kimya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burcelik Vana position performs unexpectedly, Ekiz Kimya 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 Ekiz Kimya will offset losses from the drop in Ekiz Kimya's long position.

The idea behind Burcelik Vana Sanayi and Ekiz Kimya Sanayi 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.