Correlation Between Euro Kapital and Vakif Menkul

Can any of the company-specific risk be diversified away by investing in both Euro Kapital and Vakif Menkul 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 Euro Kapital and Vakif Menkul into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Euro Kapital Yatirim and Vakif Menkul Kiymet, you can compare the effects of market volatilities on Euro Kapital and Vakif Menkul 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 Euro Kapital with a short position of Vakif Menkul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euro Kapital and Vakif Menkul.

Diversification Opportunities for Euro Kapital and Vakif Menkul

0.29

Correlation Coefficient

Euro Kapital  Vakif Menkul

Modest diversification

The 3 months correlation between Euro and Vakif is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Euro Kapital Yatirim and Vakif Menkul Kiymet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vakif Menkul Kiymet and Euro Kapital 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 Euro Kapital Yatirim are associated (or correlated) with Vakif Menkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vakif Menkul Kiymet has no effect on the direction of Euro Kapital i.e., Euro Kapital and Vakif Menkul go up and down completely randomly.

Pair Corralation between Euro Kapital and Vakif Menkul

Assuming the 90 days trading horizon Euro Kapital Yatirim is expected to generate 1.38 times more return on investment than Vakif Menkul. However, Euro Kapital is 1.38 times more volatile than Vakif Menkul Kiymet. It trades about 0.08 of its potential returns per unit of risk. Vakif Menkul Kiymet is currently generating about 0.04 per unit of risk. If you would invest  1,290  in Euro Kapital Yatirim on October 1, 2024 and sell it today you would earn a total of  220.00  from holding Euro Kapital Yatirim or generate 17.05% return on investment over 90 days.

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

Euro Kapital Yatirim  vs.  Vakif Menkul Kiymet

Euro Kapital Yatirim

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Euro Kapital Yatirim are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Euro Kapital demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Vakif Menkul Kiymet

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vakif Menkul Kiymet are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Vakif Menkul may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Euro Kapital and Vakif Menkul

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

The idea behind Euro Kapital Yatirim and Vakif Menkul Kiymet 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.

Check out your portfolio center.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.