Correlation Between Aselsan Elektronik and Enerjisa Enerji

Can any of the company-specific risk be diversified away by investing in both Aselsan Elektronik and Enerjisa 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 Aselsan Elektronik and Enerjisa Enerji 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 Enerjisa Enerji AS, you can compare the effects of market volatilities on Aselsan Elektronik and Enerjisa 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 Aselsan Elektronik with a short position of Enerjisa Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aselsan Elektronik and Enerjisa Enerji.

Diversification Opportunities for Aselsan Elektronik and Enerjisa Enerji

0.83

Correlation Coefficient

Aselsan Elektronik  Enerjisa Enerji

Very poor diversification

The 3 months correlation between Aselsan and Enerjisa is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aselsan Elektronik Sanayi and Enerjisa Enerji AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerjisa Enerji AS 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 Enerjisa Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerjisa Enerji AS has no effect on the direction of Aselsan Elektronik i.e., Aselsan Elektronik and Enerjisa Enerji go up and down completely randomly.

Pair Corralation between Aselsan Elektronik and Enerjisa Enerji

Assuming the 90 days trading horizon Aselsan Elektronik Sanayi is expected to generate 1.05 times more return on investment than Enerjisa Enerji. However, Aselsan Elektronik is 1.05 times more volatile than Enerjisa Enerji AS. It trades about 0.09 of its potential returns per unit of risk. Enerjisa Enerji AS is currently generating about 0.07 per unit of risk. If you would invest  4,686  in Aselsan Elektronik Sanayi on October 5, 2024 and sell it today you would earn a total of  2,664  from holding Aselsan Elektronik Sanayi or generate 56.85% return on investment over 90 days.

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

Aselsan Elektronik Sanayi  vs.  Enerjisa Enerji AS

Aselsan Elektronik Sanayi

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aselsan Elektronik Sanayi are ranked lower than 16 (%) 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.

Enerjisa Enerji AS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enerjisa Enerji AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Enerjisa Enerji may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aselsan Elektronik and Enerjisa Enerji

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

The idea behind Aselsan Elektronik Sanayi and Enerjisa Enerji AS 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.