Correlation Between Kent Gida and IZDEMIR Enerji

Can any of the company-specific risk be diversified away by investing in both Kent Gida and IZDEMIR 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 Kent Gida and IZDEMIR Enerji into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kent Gida Maddeleri and IZDEMIR Enerji Elektrik, you can compare the effects of market volatilities on Kent Gida and IZDEMIR 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 Kent Gida with a short position of IZDEMIR Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kent Gida and IZDEMIR Enerji.

Diversification Opportunities for Kent Gida and IZDEMIR Enerji

0.09

Correlation Coefficient

Kent Gida  IZDEMIR Enerji

Significant diversification

The 3 months correlation between Kent and IZDEMIR is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kent Gida Maddeleri and IZDEMIR Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IZDEMIR Enerji Elektrik and Kent Gida 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 Kent Gida Maddeleri are associated (or correlated) with IZDEMIR Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IZDEMIR Enerji Elektrik has no effect on the direction of Kent Gida i.e., Kent Gida and IZDEMIR Enerji go up and down completely randomly.

Pair Corralation between Kent Gida and IZDEMIR Enerji

Assuming the 90 days trading horizon Kent Gida is expected to generate 2.74 times less return on investment than IZDEMIR Enerji. In addition to that, Kent Gida is 1.1 times more volatile than IZDEMIR Enerji Elektrik. It trades about 0.02 of its total potential returns per unit of risk. IZDEMIR Enerji Elektrik is currently generating about 0.06 per unit of volatility. If you would invest  447.00  in IZDEMIR Enerji Elektrik on September 12, 2024 and sell it today you would earn a total of  43.00  from holding IZDEMIR Enerji Elektrik or generate 9.62% return on investment over 90 days.

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

Kent Gida Maddeleri  vs.  IZDEMIR Enerji Elektrik

Kent Gida Maddeleri

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kent Gida Maddeleri are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Kent Gida is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

IZDEMIR Enerji Elektrik

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in IZDEMIR Enerji Elektrik are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, IZDEMIR Enerji may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kent Gida and IZDEMIR Enerji

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

The idea behind Kent Gida Maddeleri and IZDEMIR 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..