Correlation Between Burcelik Vana and Kent Gida

Can any of the company-specific risk be diversified away by investing in both Burcelik Vana and Kent Gida 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 Kent Gida 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 Kent Gida Maddeleri, you can compare the effects of market volatilities on Burcelik Vana and Kent Gida 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 Kent Gida. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burcelik Vana and Kent Gida.

Diversification Opportunities for Burcelik Vana and Kent Gida

-0.56

Correlation Coefficient

Burcelik Vana  Kent Gida

Excellent diversification

The 3 months correlation between Burcelik and Kent is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Burcelik Vana Sanayi and Kent Gida Maddeleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kent Gida Maddeleri 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 Kent Gida. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kent Gida Maddeleri has no effect on the direction of Burcelik Vana i.e., Burcelik Vana and Kent Gida go up and down completely randomly.

Pair Corralation between Burcelik Vana and Kent Gida

Assuming the 90 days trading horizon Burcelik Vana Sanayi is expected to under-perform the Kent Gida. But the stock apears to be less risky and, when comparing its historical volatility, Burcelik Vana Sanayi is 1.16 times less risky than Kent Gida. The stock trades about -0.07 of its potential returns per unit of risk. The Kent Gida Maddeleri is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  91,450  in Kent Gida Maddeleri on September 22, 2024 and sell it today you would earn a total of  13,850  from holding Kent Gida Maddeleri or generate 15.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Burcelik Vana Sanayi  vs.  Kent Gida Maddeleri

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.

Kent Gida Maddeleri

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kent Gida Maddeleri are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Kent Gida unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Burcelik Vana and Kent Gida

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

The idea behind Burcelik Vana Sanayi and Kent Gida Maddeleri 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 Transaction History module to view history of all your transactions and understand their impact on performance.