Correlation Between Dogu Aras and Ford Otomotiv

Can any of the company-specific risk be diversified away by investing in both Dogu Aras and Ford Otomotiv 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 Dogu Aras and Ford Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dogu Aras Enerji and Ford Otomotiv Sanayi, you can compare the effects of market volatilities on Dogu Aras and Ford Otomotiv 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 Dogu Aras with a short position of Ford Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dogu Aras and Ford Otomotiv.

Diversification Opportunities for Dogu Aras and Ford Otomotiv

0.05

Correlation Coefficient

Dogu Aras  Ford Otomotiv

Significant diversification

The 3 months correlation between Dogu and Ford is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dogu Aras Enerji and Ford Otomotiv Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Otomotiv Sanayi and Dogu Aras 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 Dogu Aras Enerji are associated (or correlated) with Ford Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Otomotiv Sanayi has no effect on the direction of Dogu Aras i.e., Dogu Aras and Ford Otomotiv go up and down completely randomly.

Pair Corralation between Dogu Aras and Ford Otomotiv

Assuming the 90 days trading horizon Dogu Aras Enerji is expected to generate 1.85 times more return on investment than Ford Otomotiv. However, Dogu Aras is 1.85 times more volatile than Ford Otomotiv Sanayi. It trades about 0.0 of its potential returns per unit of risk. Ford Otomotiv Sanayi is currently generating about -0.22 per unit of risk. If you would invest  5,500  in Dogu Aras Enerji on October 10, 2024 and sell it today you would lose (20.00) from holding Dogu Aras Enerji or give up 0.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Dogu Aras Enerji  vs.  Ford Otomotiv Sanayi

Dogu Aras Enerji

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dogu Aras Enerji has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Dogu Aras is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Ford Otomotiv Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Otomotiv Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Ford Otomotiv is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Dogu Aras and Ford Otomotiv

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

The idea behind Dogu Aras Enerji and Ford Otomotiv Sanayi 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 Transaction History module to view history of all your transactions and understand their impact on performance.