Correlation Between Eczacibasi Yatirim and Alarko Holding

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

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

Diversification Opportunities for Eczacibasi Yatirim and Alarko Holding

0.86

Correlation Coefficient

Eczacibasi Yatirim  Alarko Holding

Very poor diversification

The 3 months correlation between Eczacibasi and Alarko is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Eczacibasi Yatirim Holding and Alarko Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarko Holding AS and Eczacibasi Yatirim 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 Eczacibasi Yatirim Holding are associated (or correlated) with Alarko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarko Holding AS has no effect on the direction of Eczacibasi Yatirim i.e., Eczacibasi Yatirim and Alarko Holding go up and down completely randomly.

Pair Corralation between Eczacibasi Yatirim and Alarko Holding

Assuming the 90 days trading horizon Eczacibasi Yatirim is expected to generate 5.15 times less return on investment than Alarko Holding. In addition to that, Eczacibasi Yatirim is 1.13 times more volatile than Alarko Holding AS. It trades about 0.0 of its total potential returns per unit of risk. Alarko Holding AS is currently generating about 0.02 per unit of volatility. If you would invest  9,290  in Alarko Holding AS on September 23, 2024 and sell it today you would earn a total of  180.00  from holding Alarko Holding AS or generate 1.94% return on investment over 90 days.

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

Eczacibasi Yatirim Holding  vs.  Alarko Holding AS

Eczacibasi Yatirim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eczacibasi Yatirim Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Eczacibasi Yatirim is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Alarko Holding AS

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Eczacibasi Yatirim and Alarko Holding

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

The idea behind Eczacibasi Yatirim Holding and Alarko Holding AS 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.