Correlation Between Vestel Elektronik and Hektas Ticaret

Can any of the company-specific risk be diversified away by investing in both Vestel Elektronik and Hektas Ticaret 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 Vestel Elektronik and Hektas Ticaret into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vestel Elektronik Sanayi and Hektas Ticaret TAS, you can compare the effects of market volatilities on Vestel Elektronik and Hektas Ticaret 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 Vestel Elektronik with a short position of Hektas Ticaret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestel Elektronik and Hektas Ticaret.

Diversification Opportunities for Vestel Elektronik and Hektas Ticaret

0.74

Correlation Coefficient

Vestel Elektronik  Hektas Ticaret

Poor diversification

The 3 months correlation between Vestel and Hektas is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vestel Elektronik Sanayi and Hektas Ticaret TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hektas Ticaret TAS and Vestel Elektronik 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 Vestel Elektronik Sanayi are associated (or correlated) with Hektas Ticaret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hektas Ticaret TAS has no effect on the direction of Vestel Elektronik i.e., Vestel Elektronik and Hektas Ticaret go up and down completely randomly.

Pair Corralation between Vestel Elektronik and Hektas Ticaret

Assuming the 90 days trading horizon Vestel Elektronik Sanayi is expected to generate 1.35 times more return on investment than Hektas Ticaret. However, Vestel Elektronik is 1.35 times more volatile than Hektas Ticaret TAS. It trades about 0.16 of its potential returns per unit of risk. Hektas Ticaret TAS is currently generating about -0.09 per unit of risk. If you would invest  6,220  in Vestel Elektronik Sanayi on September 27, 2024 and sell it today you would earn a total of  565.00  from holding Vestel Elektronik Sanayi or generate 9.08% return on investment over 90 days.

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

Vestel Elektronik Sanayi  vs.  Hektas Ticaret TAS

Vestel Elektronik Sanayi

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vestel Elektronik Sanayi are ranked lower than 2 (%) 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.

Hektas Ticaret TAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hektas Ticaret TAS 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 Vestel Elektronik and Hektas Ticaret

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

The idea behind Vestel Elektronik Sanayi and Hektas Ticaret TAS 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.