Correlation Between Izmir Demir and Borusan Yatirim

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

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

Diversification Opportunities for Izmir Demir and Borusan Yatirim

0.55

Correlation Coefficient

Izmir Demir  Borusan Yatirim

Very weak diversification

The 3 months correlation between Izmir and Borusan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Izmir Demir Celik and Borusan Yatirim ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borusan Yatirim ve and Izmir 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 Izmir Demir Celik are associated (or correlated) with Borusan Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borusan Yatirim ve has no effect on the direction of Izmir Demir i.e., Izmir Demir and Borusan Yatirim go up and down completely randomly.

Pair Corralation between Izmir Demir and Borusan Yatirim

Assuming the 90 days trading horizon Izmir Demir Celik is expected to under-perform the Borusan Yatirim. But the stock apears to be less risky and, when comparing its historical volatility, Izmir Demir Celik is 1.64 times less risky than Borusan Yatirim. The stock trades about -0.04 of its potential returns per unit of risk. The Borusan Yatirim ve is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  215,000  in Borusan Yatirim ve on September 4, 2024 and sell it today you would earn a total of  10,100  from holding Borusan Yatirim ve or generate 4.7% return on investment over 90 days.

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

Izmir Demir Celik  vs.  Borusan Yatirim ve

Izmir Demir Celik

Risk-Adjusted Performance

0 of 100

Very Weak

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

Borusan Yatirim ve

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Izmir Demir and Borusan Yatirim

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

The idea behind Izmir Demir Celik and Borusan Yatirim ve 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.