Correlation Between Aksa Enerji and Gubre Fabrikalari

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

By analyzing existing cross correlation between Aksa Enerji Uretim and Gubre Fabrikalari TAS, you can compare the effects of market volatilities on Aksa Enerji and Gubre Fabrikalari 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 Enerji with a short position of Gubre Fabrikalari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aksa Enerji and Gubre Fabrikalari.

Diversification Opportunities for Aksa Enerji and Gubre Fabrikalari

0.26

Correlation Coefficient

Aksa Enerji  Gubre Fabrikalari

Modest diversification

The 3 months correlation between Aksa and Gubre is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aksa Enerji Uretim and Gubre Fabrikalari TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gubre Fabrikalari TAS and Aksa 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 Aksa Enerji Uretim are associated (or correlated) with Gubre Fabrikalari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gubre Fabrikalari TAS has no effect on the direction of Aksa Enerji i.e., Aksa Enerji and Gubre Fabrikalari go up and down completely randomly.

Pair Corralation between Aksa Enerji and Gubre Fabrikalari

Assuming the 90 days trading horizon Aksa Enerji Uretim is expected to under-perform the Gubre Fabrikalari. But the stock apears to be less risky and, when comparing its historical volatility, Aksa Enerji Uretim is 1.43 times less risky than Gubre Fabrikalari. The stock trades about -0.05 of its potential returns per unit of risk. The Gubre Fabrikalari TAS is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  20,150  in Gubre Fabrikalari TAS on September 24, 2024 and sell it today you would earn a total of  7,950  from holding Gubre Fabrikalari TAS or generate 39.45% return on investment over 90 days.

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

Aksa Enerji Uretim  vs.  Gubre Fabrikalari TAS

Aksa Enerji Uretim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aksa Enerji Uretim 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.

Gubre Fabrikalari TAS

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gubre Fabrikalari TAS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gubre Fabrikalari demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aksa Enerji and Gubre Fabrikalari

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

The idea behind Aksa Enerji Uretim and Gubre Fabrikalari 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.