Correlation Between Eregli Demir and Burcelik Bursa

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

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

Diversification Opportunities for Eregli Demir and Burcelik Bursa

-0.62

Correlation Coefficient

Eregli Demir  Burcelik Bursa

Excellent diversification

The 3 months correlation between Eregli and Burcelik is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir 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 Eregli Demir 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 Eregli Demir 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 Eregli Demir i.e., Eregli Demir and Burcelik Bursa go up and down completely randomly.

Pair Corralation between Eregli Demir and Burcelik Bursa

Assuming the 90 days trading horizon Eregli Demir ve is expected to generate 0.55 times more return on investment than Burcelik Bursa. However, Eregli Demir ve is 1.83 times less risky than Burcelik Bursa. It trades about -0.02 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  2,570  in Eregli Demir ve on September 25, 2024 and sell it today you would lose (74.00) from holding Eregli Demir ve or give up 2.88% of portfolio value over 90 days.

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

Eregli Demir ve  vs.  Burcelik Bursa Celik

Eregli Demir ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eregli Demir ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Eregli Demir 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 latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Eregli Demir and Burcelik Bursa

The main advantage of trading using opposite Eregli Demir and Burcelik Bursa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir 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 Eregli Demir 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.