Correlation Between ENKA Insaat and Anadolu Efes

Can any of the company-specific risk be diversified away by investing in both ENKA Insaat and Anadolu Efes 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 ENKA Insaat and Anadolu Efes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ENKA Insaat ve and Anadolu Efes Biracilik, you can compare the effects of market volatilities on ENKA Insaat and Anadolu Efes 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 ENKA Insaat with a short position of Anadolu Efes. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENKA Insaat and Anadolu Efes.

Diversification Opportunities for ENKA Insaat and Anadolu Efes

0.62

Correlation Coefficient

ENKA Insaat  Anadolu Efes

Poor diversification

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

Pair Corralation between ENKA Insaat and Anadolu Efes

Assuming the 90 days trading horizon ENKA Insaat is expected to generate 1.38 times less return on investment than Anadolu Efes. But when comparing it to its historical volatility, ENKA Insaat ve is 1.05 times less risky than Anadolu Efes. It trades about 0.07 of its potential returns per unit of risk. Anadolu Efes Biracilik is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  6,439  in Anadolu Efes Biracilik on September 5, 2024 and sell it today you would earn a total of  14,081  from holding Anadolu Efes Biracilik or generate 218.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.19%
Values	Daily Returns

ENKA Insaat ve  vs.  Anadolu Efes Biracilik

ENKA Insaat ve

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ENKA Insaat ve are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, ENKA Insaat is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Anadolu Efes Biracilik

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ENKA Insaat and Anadolu Efes

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

The idea behind ENKA Insaat ve and Anadolu Efes Biracilik 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.