Correlation Between Zorlu Enerji and Vakif Menkul

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

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

Diversification Opportunities for Zorlu Enerji and Vakif Menkul

0.76

Correlation Coefficient

Zorlu Enerji  Vakif Menkul

Poor diversification

The 3 months correlation between Zorlu and Vakif is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Zorlu Enerji Elektrik and Vakif Menkul Kiymet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vakif Menkul Kiymet and Zorlu Enerji 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 Zorlu Enerji Elektrik are associated (or correlated) with Vakif Menkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vakif Menkul Kiymet has no effect on the direction of Zorlu Enerji i.e., Zorlu Enerji and Vakif Menkul go up and down completely randomly.

Pair Corralation between Zorlu Enerji and Vakif Menkul

Assuming the 90 days trading horizon Zorlu Enerji is expected to generate 3.05 times less return on investment than Vakif Menkul. But when comparing it to its historical volatility, Zorlu Enerji Elektrik is 1.04 times less risky than Vakif Menkul. It trades about 0.02 of its potential returns per unit of risk. Vakif Menkul Kiymet is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  822.00  in Vakif Menkul Kiymet on September 22, 2024 and sell it today you would earn a total of  1,140  from holding Vakif Menkul Kiymet or generate 138.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Zorlu Enerji Elektrik  vs.  Vakif Menkul Kiymet

Zorlu Enerji Elektrik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zorlu Enerji Elektrik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Zorlu Enerji is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Vakif Menkul Kiymet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vakif Menkul Kiymet has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Vakif Menkul is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Zorlu Enerji and Vakif Menkul

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

The idea behind Zorlu Enerji Elektrik and Vakif Menkul Kiymet 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.

Check out your portfolio center.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.