Correlation Between Borlease Otomotiv and Gozde Girisim

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

By analyzing existing cross correlation between Borlease Otomotiv AS and Gozde Girisim Sermayesi, you can compare the effects of market volatilities on Borlease Otomotiv and Gozde Girisim 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 Borlease Otomotiv with a short position of Gozde Girisim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borlease Otomotiv and Gozde Girisim.

Diversification Opportunities for Borlease Otomotiv and Gozde Girisim

0.17

Correlation Coefficient

Borlease Otomotiv  Gozde Girisim

Average diversification

The 3 months correlation between Borlease and Gozde is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Borlease Otomotiv AS and Gozde Girisim Sermayesi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gozde Girisim Sermayesi and Borlease Otomotiv 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 Borlease Otomotiv AS are associated (or correlated) with Gozde Girisim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gozde Girisim Sermayesi has no effect on the direction of Borlease Otomotiv i.e., Borlease Otomotiv and Gozde Girisim go up and down completely randomly.

Pair Corralation between Borlease Otomotiv and Gozde Girisim

Assuming the 90 days trading horizon Borlease Otomotiv AS is expected to generate 1.02 times more return on investment than Gozde Girisim. However, Borlease Otomotiv is 1.02 times more volatile than Gozde Girisim Sermayesi. It trades about 0.48 of its potential returns per unit of risk. Gozde Girisim Sermayesi is currently generating about -0.14 per unit of risk. If you would invest  5,500  in Borlease Otomotiv AS on October 6, 2024 and sell it today you would earn a total of  1,395  from holding Borlease Otomotiv AS or generate 25.36% return on investment over 90 days.

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

Borlease Otomotiv AS  vs.  Gozde Girisim Sermayesi

Borlease Otomotiv

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Borlease Otomotiv demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Gozde Girisim Sermayesi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Borlease Otomotiv and Gozde Girisim

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

The idea behind Borlease Otomotiv AS and Gozde Girisim Sermayesi 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.