Correlation Between Brisa Bridgestone and Aksa Akrilik

Can any of the company-specific risk be diversified away by investing in both Brisa Bridgestone and Aksa Akrilik 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 Brisa Bridgestone and Aksa Akrilik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brisa Bridgestone Sabanci and Aksa Akrilik Kimya, you can compare the effects of market volatilities on Brisa Bridgestone and Aksa Akrilik 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 Brisa Bridgestone with a short position of Aksa Akrilik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brisa Bridgestone and Aksa Akrilik.

Diversification Opportunities for Brisa Bridgestone and Aksa Akrilik

-0.04

Correlation Coefficient

Brisa Bridgestone  Aksa Akrilik

Good diversification

The 3 months correlation between Brisa and Aksa is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Brisa Bridgestone Sabanci and Aksa Akrilik Kimya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aksa Akrilik Kimya and Brisa Bridgestone 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 Brisa Bridgestone Sabanci are associated (or correlated) with Aksa Akrilik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aksa Akrilik Kimya has no effect on the direction of Brisa Bridgestone i.e., Brisa Bridgestone and Aksa Akrilik go up and down completely randomly.

Pair Corralation between Brisa Bridgestone and Aksa Akrilik

Assuming the 90 days trading horizon Brisa Bridgestone Sabanci is expected to generate 0.77 times more return on investment than Aksa Akrilik. However, Brisa Bridgestone Sabanci is 1.3 times less risky than Aksa Akrilik. It trades about -0.01 of its potential returns per unit of risk. Aksa Akrilik Kimya is currently generating about -0.04 per unit of risk. If you would invest  8,899  in Brisa Bridgestone Sabanci on December 29, 2024 and sell it today you would lose (224.00) from holding Brisa Bridgestone Sabanci or give up 2.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Brisa Bridgestone Sabanci  vs.  Aksa Akrilik Kimya

Brisa Bridgestone Sabanci

Risk-Adjusted Performance

Very Weak

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

Aksa Akrilik Kimya

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aksa Akrilik Kimya has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aksa Akrilik is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Brisa Bridgestone and Aksa Akrilik

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

The idea behind Brisa Bridgestone Sabanci and Aksa Akrilik Kimya 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.