Correlation Between Burcelik Vana and Gubre Fabrikalari

Can any of the company-specific risk be diversified away by investing in both Burcelik Vana and Gubre Fabrikalari 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 Gubre Fabrikalari 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 Gubre Fabrikalari TAS, you can compare the effects of market volatilities on Burcelik Vana and Gubre Fabrikalari 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 Gubre Fabrikalari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burcelik Vana and Gubre Fabrikalari.

Diversification Opportunities for Burcelik Vana and Gubre Fabrikalari

-0.84

Correlation Coefficient

Burcelik Vana  Gubre Fabrikalari

Pay attention - limited upside

The 3 months correlation between Burcelik and Gubre is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Burcelik Vana Sanayi and Gubre Fabrikalari TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gubre Fabrikalari TAS 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 Gubre Fabrikalari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gubre Fabrikalari TAS has no effect on the direction of Burcelik Vana i.e., Burcelik Vana and Gubre Fabrikalari go up and down completely randomly.

Pair Corralation between Burcelik Vana and Gubre Fabrikalari

Assuming the 90 days trading horizon Burcelik Vana Sanayi is expected to under-perform the Gubre Fabrikalari. But the stock apears to be less risky and, when comparing its historical volatility, Burcelik Vana Sanayi is 1.12 times less risky than Gubre Fabrikalari. The stock trades about -0.55 of its potential returns per unit of risk. The Gubre Fabrikalari TAS is currently generating about 0.62 of returns per unit of risk over similar time horizon. If you would invest  22,250  in Gubre Fabrikalari TAS on September 25, 2024 and sell it today you would earn a total of  5,625  from holding Gubre Fabrikalari TAS or generate 25.28% return on investment over 90 days.

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

Burcelik Vana Sanayi  vs.  Gubre Fabrikalari TAS

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.

Gubre Fabrikalari TAS

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gubre Fabrikalari TAS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Gubre Fabrikalari demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Burcelik Vana and Gubre Fabrikalari

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

The idea behind Burcelik Vana Sanayi and Gubre Fabrikalari TAS 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.