Correlation Between Mavi Giyim and Vestel Elektronik

Can any of the company-specific risk be diversified away by investing in both Mavi Giyim and Vestel Elektronik 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 Vestel Elektronik 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 Vestel Elektronik Sanayi, you can compare the effects of market volatilities on Mavi Giyim and Vestel Elektronik 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 Vestel Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mavi Giyim and Vestel Elektronik.

Diversification Opportunities for Mavi Giyim and Vestel Elektronik

0.82

Correlation Coefficient

Mavi Giyim  Vestel Elektronik

Very poor diversification

The 3 months correlation between Mavi and Vestel is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mavi Giyim Sanayi and Vestel Elektronik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestel Elektronik 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 Vestel Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestel Elektronik Sanayi has no effect on the direction of Mavi Giyim i.e., Mavi Giyim and Vestel Elektronik go up and down completely randomly.

Pair Corralation between Mavi Giyim and Vestel Elektronik

Assuming the 90 days trading horizon Mavi Giyim Sanayi is expected to under-perform the Vestel Elektronik. But the stock apears to be less risky and, when comparing its historical volatility, Mavi Giyim Sanayi is 1.2 times less risky than Vestel Elektronik. The stock trades about -0.04 of its potential returns per unit of risk. The Vestel Elektronik Sanayi is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  6,630  in Vestel Elektronik Sanayi on September 22, 2024 and sell it today you would earn a total of  60.00  from holding Vestel Elektronik Sanayi or generate 0.9% return on investment over 90 days.

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

Mavi Giyim Sanayi  vs.  Vestel Elektronik 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.

Vestel Elektronik Sanayi

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vestel Elektronik Sanayi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Vestel Elektronik is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Mavi Giyim and Vestel Elektronik

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

The idea behind Mavi Giyim Sanayi and Vestel Elektronik 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 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.