Correlation Between Burcelik Vana and Eminis Ambalaj

Can any of the company-specific risk be diversified away by investing in both Burcelik Vana and Eminis Ambalaj 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 Burcelik Vana and Eminis Ambalaj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Burcelik Vana Sanayi and Eminis Ambalaj Sanayi, you can compare the effects of market volatilities on Burcelik Vana and Eminis Ambalaj 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 Burcelik Vana with a short position of Eminis Ambalaj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burcelik Vana and Eminis Ambalaj.

Diversification Opportunities for Burcelik Vana and Eminis Ambalaj

0.62

Correlation Coefficient

Burcelik Vana  Eminis Ambalaj

Poor diversification

The 3 months correlation between Burcelik and Eminis is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Burcelik Vana Sanayi and Eminis Ambalaj Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eminis Ambalaj Sanayi and Burcelik Vana 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 Burcelik Vana Sanayi are associated (or correlated) with Eminis Ambalaj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eminis Ambalaj Sanayi has no effect on the direction of Burcelik Vana i.e., Burcelik Vana and Eminis Ambalaj go up and down completely randomly.

Pair Corralation between Burcelik Vana and Eminis Ambalaj

Assuming the 90 days trading horizon Burcelik Vana Sanayi is expected to under-perform the Eminis Ambalaj. But the stock apears to be less risky and, when comparing its historical volatility, Burcelik Vana Sanayi is 1.15 times less risky than Eminis Ambalaj. The stock trades about -0.07 of its potential returns per unit of risk. The Eminis Ambalaj Sanayi is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  30,275  in Eminis Ambalaj Sanayi on September 22, 2024 and sell it today you would lose (4,475) from holding Eminis Ambalaj Sanayi or give up 14.78% of portfolio value over 90 days.

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

Burcelik Vana Sanayi  vs.  Eminis Ambalaj Sanayi

Burcelik Vana Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Burcelik Vana Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Eminis Ambalaj Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eminis Ambalaj Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Burcelik Vana and Eminis Ambalaj

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

The idea behind Burcelik Vana Sanayi and Eminis Ambalaj 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.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.