Correlation Between Aksa Enerji and Zedur Enerji

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

Diversification Opportunities for Aksa Enerji and Zedur Enerji

0.78

Correlation Coefficient

Aksa Enerji  Zedur Enerji

Poor diversification

The 3 months correlation between Aksa and Zedur is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aksa Enerji Uretim and Zedur Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedur Enerji Elektrik 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 Zedur Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedur Enerji Elektrik has no effect on the direction of Aksa Enerji i.e., Aksa Enerji and Zedur Enerji go up and down completely randomly.

Pair Corralation between Aksa Enerji and Zedur Enerji

Assuming the 90 days trading horizon Aksa Enerji Uretim is expected to generate 0.65 times more return on investment than Zedur Enerji. However, Aksa Enerji Uretim is 1.54 times less risky than Zedur Enerji. It trades about 0.17 of its potential returns per unit of risk. Zedur Enerji Elektrik is currently generating about 0.1 per unit of risk. If you would invest  3,422  in Aksa Enerji Uretim on October 22, 2024 and sell it today you would earn a total of  646.00  from holding Aksa Enerji Uretim or generate 18.88% return on investment over 90 days.

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

Aksa Enerji Uretim  vs.  Zedur Enerji Elektrik

Aksa Enerji Uretim

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aksa Enerji Uretim are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Aksa Enerji demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Zedur Enerji Elektrik

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Aksa Enerji and Zedur Enerji

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

The idea behind Aksa Enerji Uretim and Zedur Enerji Elektrik 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.