Correlation Between Verusaturk Girisim and Hedef Holdings

Can any of the company-specific risk be diversified away by investing in both Verusaturk Girisim and Hedef Holdings 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 Verusaturk Girisim and Hedef Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Verusaturk Girisim Sermayesi and Hedef Holdings AS, you can compare the effects of market volatilities on Verusaturk Girisim and Hedef Holdings 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 Verusaturk Girisim with a short position of Hedef Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verusaturk Girisim and Hedef Holdings.

Diversification Opportunities for Verusaturk Girisim and Hedef Holdings

0.81

Correlation Coefficient

Verusaturk Girisim  Hedef Holdings

Very poor diversification

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

Pair Corralation between Verusaturk Girisim and Hedef Holdings

Assuming the 90 days trading horizon Verusaturk Girisim Sermayesi is expected to under-perform the Hedef Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Verusaturk Girisim Sermayesi is 1.61 times less risky than Hedef Holdings. The stock trades about -0.18 of its potential returns per unit of risk. The Hedef Holdings AS is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  352.00  in Hedef Holdings AS on September 22, 2024 and sell it today you would lose (41.00) from holding Hedef Holdings AS or give up 11.65% of portfolio value over 90 days.

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

Verusaturk Girisim Sermayesi  vs.  Hedef Holdings AS

Verusaturk Girisim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verusaturk Girisim Sermayesi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Hedef Holdings AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hedef Holdings AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Verusaturk Girisim and Hedef Holdings

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

The idea behind Verusaturk Girisim Sermayesi and Hedef Holdings AS 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.