Correlation Between Ekiz Kimya and Burcelik Vana

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

By analyzing existing cross correlation between Ekiz Kimya Sanayi and Burcelik Vana Sanayi, you can compare the effects of market volatilities on Ekiz Kimya and Burcelik Vana 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 Ekiz Kimya with a short position of Burcelik Vana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekiz Kimya and Burcelik Vana.

Diversification Opportunities for Ekiz Kimya and Burcelik Vana

-0.26

Correlation Coefficient

Ekiz Kimya  Burcelik Vana

Very good diversification

The 3 months correlation between Ekiz and Burcelik is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ekiz Kimya Sanayi and Burcelik Vana Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burcelik Vana Sanayi and Ekiz Kimya 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 Ekiz Kimya Sanayi are associated (or correlated) with Burcelik Vana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burcelik Vana Sanayi has no effect on the direction of Ekiz Kimya i.e., Ekiz Kimya and Burcelik Vana go up and down completely randomly.

Pair Corralation between Ekiz Kimya and Burcelik Vana

Assuming the 90 days trading horizon Ekiz Kimya Sanayi is expected to generate 0.79 times more return on investment than Burcelik Vana. However, Ekiz Kimya Sanayi is 1.27 times less risky than Burcelik Vana. It trades about 0.01 of its potential returns per unit of risk. Burcelik Vana Sanayi is currently generating about -0.08 per unit of risk. If you would invest  5,720  in Ekiz Kimya Sanayi on October 1, 2024 and sell it today you would lose (15.00) from holding Ekiz Kimya Sanayi or give up 0.26% of portfolio value over 90 days.

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

Ekiz Kimya Sanayi  vs.  Burcelik Vana Sanayi

Ekiz Kimya Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekiz Kimya Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ekiz Kimya is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Burcelik Vana Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Burcelik Vana Sanayi 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 Ekiz Kimya and Burcelik Vana

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

The idea behind Ekiz Kimya Sanayi and Burcelik Vana Sanayi 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.