Correlation Between Ege Profil and Borlease Otomotiv

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

By analyzing existing cross correlation between Ege Profil Ticaret and Borlease Otomotiv AS, you can compare the effects of market volatilities on Ege Profil and Borlease Otomotiv 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 Profil with a short position of Borlease Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Profil and Borlease Otomotiv.

Diversification Opportunities for Ege Profil and Borlease Otomotiv

0.62

Correlation Coefficient

Ege Profil  Borlease Otomotiv

Poor diversification

The 3 months correlation between Ege and Borlease is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ege Profil Ticaret and Borlease Otomotiv AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borlease Otomotiv and Ege Profil 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 Profil Ticaret are associated (or correlated) with Borlease Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borlease Otomotiv has no effect on the direction of Ege Profil i.e., Ege Profil and Borlease Otomotiv go up and down completely randomly.

Pair Corralation between Ege Profil and Borlease Otomotiv

Assuming the 90 days trading horizon Ege Profil is expected to generate 1.25 times less return on investment than Borlease Otomotiv. In addition to that, Ege Profil is 1.1 times more volatile than Borlease Otomotiv AS. It trades about 0.08 of its total potential returns per unit of risk. Borlease Otomotiv AS is currently generating about 0.11 per unit of volatility. If you would invest  2,732  in Borlease Otomotiv AS on September 24, 2024 and sell it today you would earn a total of  3,883  from holding Borlease Otomotiv AS or generate 142.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	59.68%
Values	Daily Returns

Ege Profil Ticaret  vs.  Borlease Otomotiv AS

Ege Profil Ticaret

Risk-Adjusted Performance

1 of 100

Weak

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

Borlease Otomotiv

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Borlease Otomotiv demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ege Profil and Borlease Otomotiv

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

The idea behind Ege Profil Ticaret and Borlease Otomotiv 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..