Correlation Between Desa Deri and Emlak Konut

Can any of the company-specific risk be diversified away by investing in both Desa Deri and Emlak Konut 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 Desa Deri and Emlak Konut into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Desa Deri Sanayi and Emlak Konut Gayrimenkul, you can compare the effects of market volatilities on Desa Deri and Emlak Konut 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 Desa Deri with a short position of Emlak Konut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desa Deri and Emlak Konut.

Diversification Opportunities for Desa Deri and Emlak Konut

0.67

Correlation Coefficient

Desa Deri  Emlak Konut

Poor diversification

The 3 months correlation between Desa and Emlak is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Desa Deri Sanayi and Emlak Konut Gayrimenkul in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emlak Konut Gayrimenkul and Desa Deri 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 Desa Deri Sanayi are associated (or correlated) with Emlak Konut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emlak Konut Gayrimenkul has no effect on the direction of Desa Deri i.e., Desa Deri and Emlak Konut go up and down completely randomly.

Pair Corralation between Desa Deri and Emlak Konut

Assuming the 90 days trading horizon Desa Deri Sanayi is expected to under-perform the Emlak Konut. But the stock apears to be less risky and, when comparing its historical volatility, Desa Deri Sanayi is 1.27 times less risky than Emlak Konut. The stock trades about -0.01 of its potential returns per unit of risk. The Emlak Konut Gayrimenkul is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,212  in Emlak Konut Gayrimenkul on September 23, 2024 and sell it today you would earn a total of  88.00  from holding Emlak Konut Gayrimenkul or generate 7.26% return on investment over 90 days.

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

Desa Deri Sanayi  vs.  Emlak Konut Gayrimenkul

Desa Deri Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Desa Deri Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Desa Deri is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Emlak Konut Gayrimenkul

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Emlak Konut Gayrimenkul are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Emlak Konut may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Desa Deri and Emlak Konut

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

The idea behind Desa Deri Sanayi and Emlak Konut Gayrimenkul 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.