Correlation Between BIM Birlesik and Eregli Demir

Can any of the company-specific risk be diversified away by investing in both BIM Birlesik and Eregli Demir 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 BIM Birlesik and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BIM Birlesik Magazalar and Eregli Demir ve, you can compare the effects of market volatilities on BIM Birlesik and Eregli Demir 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 BIM Birlesik with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIM Birlesik and Eregli Demir.

Diversification Opportunities for BIM Birlesik and Eregli Demir

0.65

Correlation Coefficient

BIM Birlesik  Eregli Demir

Poor diversification

The 3 months correlation between BIM and Eregli is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BIM Birlesik Magazalar and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and BIM Birlesik 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 BIM Birlesik Magazalar are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of BIM Birlesik i.e., BIM Birlesik and Eregli Demir go up and down completely randomly.

Pair Corralation between BIM Birlesik and Eregli Demir

Assuming the 90 days trading horizon BIM Birlesik Magazalar is expected to generate 1.17 times more return on investment than Eregli Demir. However, BIM Birlesik is 1.17 times more volatile than Eregli Demir ve. It trades about 0.23 of its potential returns per unit of risk. Eregli Demir ve is currently generating about 0.01 per unit of risk. If you would invest  47,059  in BIM Birlesik Magazalar on September 27, 2024 and sell it today you would earn a total of  4,741  from holding BIM Birlesik Magazalar or generate 10.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

BIM Birlesik Magazalar  vs.  Eregli Demir ve

BIM Birlesik Magazalar

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BIM Birlesik Magazalar are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, BIM Birlesik may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eregli Demir ve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BIM Birlesik and Eregli Demir

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

The idea behind BIM Birlesik Magazalar and Eregli Demir ve 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.