Correlation Between Mavi Giyim and Ford Otomotiv

Can any of the company-specific risk be diversified away by investing in both Mavi Giyim and Ford Otomotiv 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 Mavi Giyim and Ford Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mavi Giyim Sanayi and Ford Otomotiv Sanayi, you can compare the effects of market volatilities on Mavi Giyim and Ford Otomotiv 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 Mavi Giyim with a short position of Ford Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mavi Giyim and Ford Otomotiv.

Diversification Opportunities for Mavi Giyim and Ford Otomotiv

-0.38

Correlation Coefficient

Mavi Giyim  Ford Otomotiv

Very good diversification

The 3 months correlation between Mavi and Ford is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mavi Giyim Sanayi and Ford Otomotiv Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Otomotiv Sanayi and Mavi Giyim 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 Mavi Giyim Sanayi are associated (or correlated) with Ford Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Otomotiv Sanayi has no effect on the direction of Mavi Giyim i.e., Mavi Giyim and Ford Otomotiv go up and down completely randomly.

Pair Corralation between Mavi Giyim and Ford Otomotiv

Assuming the 90 days trading horizon Mavi Giyim Sanayi is expected to under-perform the Ford Otomotiv. But the stock apears to be less risky and, when comparing its historical volatility, Mavi Giyim Sanayi is 1.0 times less risky than Ford Otomotiv. The stock trades about -0.04 of its potential returns per unit of risk. The Ford Otomotiv Sanayi is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  89,922  in Ford Otomotiv Sanayi on September 22, 2024 and sell it today you would earn a total of  5,028  from holding Ford Otomotiv Sanayi or generate 5.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Mavi Giyim Sanayi  vs.  Ford Otomotiv Sanayi

Mavi Giyim Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mavi Giyim Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mavi Giyim is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Ford Otomotiv Sanayi

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Mavi Giyim and Ford Otomotiv

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

The idea behind Mavi Giyim Sanayi and Ford Otomotiv Sanayi 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.