Correlation Between Gentas Genel and Zorlu Enerji

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Can any of the company-specific risk be diversified away by investing in both Gentas Genel and Zorlu Enerji 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 Gentas Genel and Zorlu Enerji into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentas Genel Metal and Zorlu Enerji Elektrik, you can compare the effects of market volatilities on Gentas Genel and Zorlu Enerji 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 Gentas Genel with a short position of Zorlu Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentas Genel and Zorlu Enerji.

Diversification Opportunities for Gentas Genel and Zorlu Enerji

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Gentas and Zorlu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gentas Genel Metal and Zorlu Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zorlu Enerji Elektrik and Gentas Genel 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 Gentas Genel Metal are associated (or correlated) with Zorlu Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zorlu Enerji Elektrik has no effect on the direction of Gentas Genel i.e., Gentas Genel and Zorlu Enerji go up and down completely randomly.

Pair Corralation between Gentas Genel and Zorlu Enerji

Assuming the 90 days trading horizon Gentas Genel Metal is expected to generate 1.22 times more return on investment than Zorlu Enerji. However, Gentas Genel is 1.22 times more volatile than Zorlu Enerji Elektrik. It trades about 0.12 of its potential returns per unit of risk. Zorlu Enerji Elektrik is currently generating about 0.01 per unit of risk. If you would invest  811.00  in Gentas Genel Metal on September 23, 2024 and sell it today you would earn a total of  132.00  from holding Gentas Genel Metal or generate 16.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Gentas Genel Metal  vs.  Zorlu Enerji Elektrik

 Performance 
       Timeline  
Gentas Genel Metal 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Gentas Genel Metal are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gentas Genel demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Zorlu Enerji Elektrik 

Risk-Adjusted Performance

0 of 100

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

Gentas Genel and Zorlu Enerji Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gentas Genel and Zorlu Enerji

The main advantage of trading using opposite Gentas Genel and Zorlu Enerji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentas Genel position performs unexpectedly, Zorlu Enerji 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 Zorlu Enerji will offset losses from the drop in Zorlu Enerji's long position.
The idea behind Gentas Genel Metal and Zorlu Enerji Elektrik 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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