Correlation Between BIM Birlesik and Pegasus Hava

Can any of the company-specific risk be diversified away by investing in both BIM Birlesik and Pegasus Hava 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 Pegasus Hava 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 Pegasus Hava Tasimaciligi, you can compare the effects of market volatilities on BIM Birlesik and Pegasus Hava 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 Pegasus Hava. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIM Birlesik and Pegasus Hava.

Diversification Opportunities for BIM Birlesik and Pegasus Hava

-0.55

Correlation Coefficient

BIM Birlesik  Pegasus Hava

Excellent diversification

The 3 months correlation between BIM and Pegasus is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BIM Birlesik Magazalar and Pegasus Hava Tasimaciligi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Hava Tasimaciligi 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 Pegasus Hava. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Hava Tasimaciligi has no effect on the direction of BIM Birlesik i.e., BIM Birlesik and Pegasus Hava go up and down completely randomly.

Pair Corralation between BIM Birlesik and Pegasus Hava

Assuming the 90 days trading horizon BIM Birlesik Magazalar is expected to generate 1.02 times more return on investment than Pegasus Hava. However, BIM Birlesik is 1.02 times more volatile than Pegasus Hava Tasimaciligi. It trades about 0.12 of its potential returns per unit of risk. Pegasus Hava Tasimaciligi is currently generating about -0.04 per unit of risk. If you would invest  48,870  in BIM Birlesik Magazalar on October 7, 2024 and sell it today you would earn a total of  4,230  from holding BIM Birlesik Magazalar or generate 8.66% return on investment over 90 days.

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

BIM Birlesik Magazalar  vs.  Pegasus Hava Tasimaciligi

BIM Birlesik Magazalar

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BIM Birlesik Magazalar are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, BIM Birlesik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pegasus Hava Tasimaciligi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pegasus Hava Tasimaciligi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Pegasus Hava 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 Pegasus Hava

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

The idea behind BIM Birlesik Magazalar and Pegasus Hava Tasimaciligi 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.