Correlation Between Alfas Solar and Atlas Menkul

Can any of the company-specific risk be diversified away by investing in both Alfas Solar and Atlas Menkul 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 Alfas Solar and Atlas Menkul into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alfas Solar Enerji and Atlas Menkul Kiymetler, you can compare the effects of market volatilities on Alfas Solar and Atlas Menkul 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 Alfas Solar with a short position of Atlas Menkul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfas Solar and Atlas Menkul.

Diversification Opportunities for Alfas Solar and Atlas Menkul

0.72

Correlation Coefficient

Alfas Solar  Atlas Menkul

Poor diversification

The 3 months correlation between Alfas and Atlas is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alfas Solar Enerji and Atlas Menkul Kiymetler in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Menkul Kiymetler and Alfas Solar 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 Alfas Solar Enerji are associated (or correlated) with Atlas Menkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Menkul Kiymetler has no effect on the direction of Alfas Solar i.e., Alfas Solar and Atlas Menkul go up and down completely randomly.

Pair Corralation between Alfas Solar and Atlas Menkul

Assuming the 90 days trading horizon Alfas Solar Enerji is expected to generate 8.69 times more return on investment than Atlas Menkul. However, Alfas Solar is 8.69 times more volatile than Atlas Menkul Kiymetler. It trades about 0.05 of its potential returns per unit of risk. Atlas Menkul Kiymetler is currently generating about 0.05 per unit of risk. If you would invest  3,409  in Alfas Solar Enerji on September 23, 2024 and sell it today you would earn a total of  2,886  from holding Alfas Solar Enerji or generate 84.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.2%
Values	Daily Returns

Alfas Solar Enerji  vs.  Atlas Menkul Kiymetler

Alfas Solar Enerji

Risk-Adjusted Performance

7 of 100

OK

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

Atlas Menkul Kiymetler

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Menkul Kiymetler are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Atlas Menkul demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alfas Solar and Atlas Menkul

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

The idea behind Alfas Solar Enerji and Atlas Menkul Kiymetler 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.