Correlation Between Ege Endustri and Turkiye Sise

Can any of the company-specific risk be diversified away by investing in both Ege Endustri and Turkiye Sise 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 Turkiye Sise 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 Turkiye Sise ve, you can compare the effects of market volatilities on Ege Endustri and Turkiye Sise 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 Turkiye Sise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Endustri and Turkiye Sise.

Diversification Opportunities for Ege Endustri and Turkiye Sise

0.45

Correlation Coefficient

Ege Endustri  Turkiye Sise

Very weak diversification

The 3 months correlation between Ege and Turkiye is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve and Turkiye Sise ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Sise ve 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 Turkiye Sise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Sise ve has no effect on the direction of Ege Endustri i.e., Ege Endustri and Turkiye Sise go up and down completely randomly.

Pair Corralation between Ege Endustri and Turkiye Sise

Assuming the 90 days trading horizon Ege Endustri ve is expected to under-perform the Turkiye Sise. In addition to that, Ege Endustri is 1.39 times more volatile than Turkiye Sise ve. It trades about -0.02 of its total potential returns per unit of risk. Turkiye Sise ve is currently generating about 0.05 per unit of volatility. If you would invest  4,082  in Turkiye Sise ve on September 15, 2024 and sell it today you would earn a total of  226.00  from holding Turkiye Sise ve or generate 5.54% return on investment over 90 days.

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

Ege Endustri ve  vs.  Turkiye Sise ve

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.

Turkiye Sise ve

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Sise ve are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Turkiye Sise may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ege Endustri and Turkiye Sise

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

The idea behind Ege Endustri ve and Turkiye Sise ve 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.