Correlation Between Ege Endustri and Burcelik Bursa

Can any of the company-specific risk be diversified away by investing in both Ege Endustri and Burcelik Bursa 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 Ege Endustri and Burcelik Bursa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ege Endustri ve and Burcelik Bursa Celik, you can compare the effects of market volatilities on Ege Endustri and Burcelik Bursa 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 Ege Endustri with a short position of Burcelik Bursa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Endustri and Burcelik Bursa.

Diversification Opportunities for Ege Endustri and Burcelik Bursa

-0.47

Correlation Coefficient

Ege Endustri  Burcelik Bursa

Very good diversification

The 3 months correlation between Ege and Burcelik is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve and Burcelik Bursa Celik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burcelik Bursa Celik and Ege Endustri 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 Ege Endustri ve are associated (or correlated) with Burcelik Bursa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burcelik Bursa Celik has no effect on the direction of Ege Endustri i.e., Ege Endustri and Burcelik Bursa go up and down completely randomly.

Pair Corralation between Ege Endustri and Burcelik Bursa

Assuming the 90 days trading horizon Ege Endustri ve is expected to generate 0.79 times more return on investment than Burcelik Bursa. However, Ege Endustri ve is 1.27 times less risky than Burcelik Bursa. It trades about -0.01 of its potential returns per unit of risk. Burcelik Bursa Celik is currently generating about -0.06 per unit of risk. If you would invest  1,083,250  in Ege Endustri ve on September 18, 2024 and sell it today you would lose (43,250) from holding Ege Endustri ve or give up 3.99% of portfolio value over 90 days.

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

Ege Endustri ve  vs.  Burcelik Bursa Celik

Ege Endustri ve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Burcelik Bursa Celik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Burcelik Bursa Celik 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.

Pair Trading with Ege Endustri and Burcelik Bursa

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

The idea behind Ege Endustri ve and Burcelik Bursa Celik 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.