Correlation Between Deva Holding and Alkim Alkali

Can any of the company-specific risk be diversified away by investing in both Deva Holding and Alkim Alkali 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 Deva Holding and Alkim Alkali into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Deva Holding AS and Alkim Alkali Kimya, you can compare the effects of market volatilities on Deva Holding and Alkim Alkali 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 Deva Holding with a short position of Alkim Alkali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deva Holding and Alkim Alkali.

Diversification Opportunities for Deva Holding and Alkim Alkali

-0.14

Correlation Coefficient

Deva Holding  Alkim Alkali

Good diversification

The 3 months correlation between Deva and Alkim is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Deva Holding AS and Alkim Alkali Kimya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Alkali Kimya and Deva Holding 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 Deva Holding AS are associated (or correlated) with Alkim Alkali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Alkali Kimya has no effect on the direction of Deva Holding i.e., Deva Holding and Alkim Alkali go up and down completely randomly.

Pair Corralation between Deva Holding and Alkim Alkali

Assuming the 90 days trading horizon Deva Holding AS is expected to generate 0.9 times more return on investment than Alkim Alkali. However, Deva Holding AS is 1.11 times less risky than Alkim Alkali. It trades about 0.03 of its potential returns per unit of risk. Alkim Alkali Kimya is currently generating about 0.02 per unit of risk. If you would invest  6,820  in Deva Holding AS on September 5, 2024 and sell it today you would earn a total of  185.00  from holding Deva Holding AS or generate 2.71% return on investment over 90 days.

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

Deva Holding AS  vs.  Alkim Alkali Kimya

Deva Holding AS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Deva Holding AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Deva Holding is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Alkim Alkali Kimya

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Alkali Kimya are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Alkim Alkali is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Deva Holding and Alkim Alkali

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

The idea behind Deva Holding AS and Alkim Alkali Kimya 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.