Correlation Between Aksa Akrilik and Eregli Demir

Can any of the company-specific risk be diversified away by investing in both Aksa Akrilik and Eregli Demir 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 Aksa Akrilik and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aksa Akrilik Kimya and Eregli Demir ve, you can compare the effects of market volatilities on Aksa Akrilik and Eregli Demir 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 Aksa Akrilik with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aksa Akrilik and Eregli Demir.

Diversification Opportunities for Aksa Akrilik and Eregli Demir

0.41

Correlation Coefficient

Aksa Akrilik  Eregli Demir

Very weak diversification

The 3 months correlation between Aksa and Eregli is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aksa Akrilik Kimya and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and Aksa Akrilik 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 Aksa Akrilik Kimya are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Aksa Akrilik i.e., Aksa Akrilik and Eregli Demir go up and down completely randomly.

Pair Corralation between Aksa Akrilik and Eregli Demir

Assuming the 90 days trading horizon Aksa Akrilik Kimya is expected to generate 1.0 times more return on investment than Eregli Demir. However, Aksa Akrilik is 1.0 times more volatile than Eregli Demir ve. It trades about -0.04 of its potential returns per unit of risk. Eregli Demir ve is currently generating about -0.04 per unit of risk. If you would invest  1,213  in Aksa Akrilik Kimya on December 30, 2024 and sell it today you would lose (96.00) from holding Aksa Akrilik Kimya or give up 7.91% of portfolio value over 90 days.

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

Aksa Akrilik Kimya  vs.  Eregli Demir ve

Aksa Akrilik Kimya

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aksa Akrilik Kimya has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aksa Akrilik is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Eregli Demir ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eregli Demir ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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 Aksa Akrilik and Eregli Demir

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

The idea behind Aksa Akrilik Kimya and Eregli Demir 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.