Correlation Between Afyon Cimento and Ege Endustri

Can any of the company-specific risk be diversified away by investing in both Afyon Cimento and Ege Endustri 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 Afyon Cimento and Ege Endustri into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Afyon Cimento Sanayi and Ege Endustri ve, you can compare the effects of market volatilities on Afyon Cimento and Ege Endustri 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 Afyon Cimento with a short position of Ege Endustri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afyon Cimento and Ege Endustri.

Diversification Opportunities for Afyon Cimento and Ege Endustri

0.02

Correlation Coefficient

Afyon Cimento  Ege Endustri

Significant diversification

The 3 months correlation between Afyon and Ege is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Afyon Cimento Sanayi and Ege Endustri ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Endustri ve and Afyon Cimento 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 Afyon Cimento Sanayi are associated (or correlated) with Ege Endustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Endustri ve has no effect on the direction of Afyon Cimento i.e., Afyon Cimento and Ege Endustri go up and down completely randomly.

Pair Corralation between Afyon Cimento and Ege Endustri

Assuming the 90 days trading horizon Afyon Cimento Sanayi is expected to under-perform the Ege Endustri. But the stock apears to be less risky and, when comparing its historical volatility, Afyon Cimento Sanayi is 1.09 times less risky than Ege Endustri. The stock trades about -0.18 of its potential returns per unit of risk. The Ege Endustri ve is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  925,250  in Ege Endustri ve on December 4, 2024 and sell it today you would lose (45,250) from holding Ege Endustri ve or give up 4.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Afyon Cimento Sanayi  vs.  Ege Endustri ve

Afyon Cimento Sanayi

Risk-Adjusted Performance

Weak

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

Ege Endustri ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ege Endustri ve 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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Afyon Cimento and Ege Endustri

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

The idea behind Afyon Cimento Sanayi and Ege Endustri ve 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.