Correlation Between Afyon Cimento and Silverline Endustri

Can any of the company-specific risk be diversified away by investing in both Afyon Cimento and Silverline 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 Silverline 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 Silverline Endustri ve, you can compare the effects of market volatilities on Afyon Cimento and Silverline 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 Silverline Endustri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afyon Cimento and Silverline Endustri.

Diversification Opportunities for Afyon Cimento and Silverline Endustri

0.43

Correlation Coefficient

Afyon Cimento  Silverline Endustri

Very weak diversification

The 3 months correlation between Afyon and Silverline is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Afyon Cimento Sanayi and Silverline Endustri ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silverline Endustri 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 Silverline Endustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silverline Endustri has no effect on the direction of Afyon Cimento i.e., Afyon Cimento and Silverline Endustri go up and down completely randomly.

Pair Corralation between Afyon Cimento and Silverline Endustri

Assuming the 90 days trading horizon Afyon Cimento Sanayi is expected to generate 1.17 times more return on investment than Silverline Endustri. However, Afyon Cimento is 1.17 times more volatile than Silverline Endustri ve. It trades about -0.05 of its potential returns per unit of risk. Silverline Endustri ve is currently generating about -0.31 per unit of risk. If you would invest  1,591  in Afyon Cimento Sanayi on October 9, 2024 and sell it today you would lose (38.00) from holding Afyon Cimento Sanayi or give up 2.39% of portfolio value over 90 days.

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

Afyon Cimento Sanayi  vs.  Silverline Endustri ve

Afyon Cimento Sanayi

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Afyon Cimento Sanayi are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Afyon Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Silverline Endustri

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Afyon Cimento and Silverline Endustri

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

The idea behind Afyon Cimento Sanayi and Silverline 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.