Correlation Between Brisa Bridgestone and Yunsa Yunlu

Can any of the company-specific risk be diversified away by investing in both Brisa Bridgestone and Yunsa Yunlu 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 Yunsa Yunlu 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 Yunsa Yunlu Sanayi, you can compare the effects of market volatilities on Brisa Bridgestone and Yunsa Yunlu 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 Yunsa Yunlu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brisa Bridgestone and Yunsa Yunlu.

Diversification Opportunities for Brisa Bridgestone and Yunsa Yunlu

0.28

Correlation Coefficient

Brisa Bridgestone  Yunsa Yunlu

Modest diversification

The 3 months correlation between Brisa and Yunsa is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Brisa Bridgestone Sabanci and Yunsa Yunlu Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunsa Yunlu Sanayi 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 Yunsa Yunlu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunsa Yunlu Sanayi has no effect on the direction of Brisa Bridgestone i.e., Brisa Bridgestone and Yunsa Yunlu go up and down completely randomly.

Pair Corralation between Brisa Bridgestone and Yunsa Yunlu

Assuming the 90 days trading horizon Brisa Bridgestone Sabanci is expected to under-perform the Yunsa Yunlu. But the stock apears to be less risky and, when comparing its historical volatility, Brisa Bridgestone Sabanci is 1.76 times less risky than Yunsa Yunlu. The stock trades about -0.06 of its potential returns per unit of risk. The Yunsa Yunlu Sanayi is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  623.00  in Yunsa Yunlu Sanayi on October 25, 2024 and sell it today you would earn a total of  18.00  from holding Yunsa Yunlu Sanayi or generate 2.89% return on investment over 90 days.

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

Brisa Bridgestone Sabanci  vs.  Yunsa Yunlu Sanayi

Brisa Bridgestone Sabanci

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brisa Bridgestone Sabanci are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Yunsa Yunlu Sanayi

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yunsa Yunlu Sanayi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Yunsa Yunlu is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Brisa Bridgestone and Yunsa Yunlu

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

The idea behind Brisa Bridgestone Sabanci and Yunsa Yunlu Sanayi 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.