Correlation Between China Overseas and Anadolu Efes

Can any of the company-specific risk be diversified away by investing in both China Overseas and Anadolu Efes 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 China Overseas and Anadolu Efes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Overseas Land and Anadolu Efes Biracilik, you can compare the effects of market volatilities on China Overseas and Anadolu Efes 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 China Overseas with a short position of Anadolu Efes. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Overseas and Anadolu Efes.

Diversification Opportunities for China Overseas and Anadolu Efes

-0.61

Correlation Coefficient

China Overseas  Anadolu Efes

Excellent diversification

The 3 months correlation between China and Anadolu is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Overseas Land and Anadolu Efes Biracilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadolu Efes Biracilik and China Overseas 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 China Overseas Land are associated (or correlated) with Anadolu Efes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anadolu Efes Biracilik has no effect on the direction of China Overseas i.e., China Overseas and Anadolu Efes go up and down completely randomly.

Pair Corralation between China Overseas and Anadolu Efes

Assuming the 90 days horizon China Overseas Land is expected to under-perform the Anadolu Efes. But the pink sheet apears to be less risky and, when comparing its historical volatility, China Overseas Land is 1.17 times less risky than Anadolu Efes. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Anadolu Efes Biracilik is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Anadolu Efes Biracilik on September 26, 2024 and sell it today you would earn a total of  12.00  from holding Anadolu Efes Biracilik or generate 9.68% return on investment over 90 days.

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

China Overseas Land  vs.  Anadolu Efes Biracilik

China Overseas Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Overseas Land has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Anadolu Efes Biracilik

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anadolu Efes Biracilik are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Anadolu Efes showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Overseas and Anadolu Efes

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

The idea behind China Overseas Land and Anadolu Efes Biracilik 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.