Correlation Between Aselsan Elektronik and Burcelik Vana

Can any of the company-specific risk be diversified away by investing in both Aselsan Elektronik and Burcelik Vana 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 Aselsan Elektronik and Burcelik Vana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aselsan Elektronik Sanayi and Burcelik Vana Sanayi, you can compare the effects of market volatilities on Aselsan Elektronik and Burcelik Vana 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 Aselsan Elektronik with a short position of Burcelik Vana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aselsan Elektronik and Burcelik Vana.

Diversification Opportunities for Aselsan Elektronik and Burcelik Vana

-0.89

Correlation Coefficient

Aselsan Elektronik  Burcelik Vana

Pay attention - limited upside

The 3 months correlation between Aselsan and Burcelik is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aselsan Elektronik Sanayi and Burcelik Vana Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burcelik Vana Sanayi and Aselsan Elektronik 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 Aselsan Elektronik Sanayi are associated (or correlated) with Burcelik Vana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burcelik Vana Sanayi has no effect on the direction of Aselsan Elektronik i.e., Aselsan Elektronik and Burcelik Vana go up and down completely randomly.

Pair Corralation between Aselsan Elektronik and Burcelik Vana

Assuming the 90 days trading horizon Aselsan Elektronik Sanayi is expected to generate 0.59 times more return on investment than Burcelik Vana. However, Aselsan Elektronik Sanayi is 1.7 times less risky than Burcelik Vana. It trades about 0.16 of its potential returns per unit of risk. Burcelik Vana Sanayi is currently generating about -0.12 per unit of risk. If you would invest  7,125  in Aselsan Elektronik Sanayi on October 8, 2024 and sell it today you would earn a total of  360.00  from holding Aselsan Elektronik Sanayi or generate 5.05% return on investment over 90 days.

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

Aselsan Elektronik Sanayi  vs.  Burcelik Vana Sanayi

Aselsan Elektronik Sanayi

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aselsan Elektronik Sanayi are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Aselsan Elektronik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Burcelik Vana Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Burcelik Vana Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent 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 Aselsan Elektronik and Burcelik Vana

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

The idea behind Aselsan Elektronik Sanayi and Burcelik Vana 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.