Correlation Between Burcelik Vana and Vakif Menkul

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

Diversification Opportunities for Burcelik Vana and Vakif Menkul

-0.62

Correlation Coefficient

Burcelik Vana  Vakif Menkul

Excellent diversification

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

Pair Corralation between Burcelik Vana and Vakif Menkul

Assuming the 90 days trading horizon Burcelik Vana Sanayi is expected to under-perform the Vakif Menkul. But the stock apears to be less risky and, when comparing its historical volatility, Burcelik Vana Sanayi is 1.01 times less risky than Vakif Menkul. The stock trades about -0.59 of its potential returns per unit of risk. The Vakif Menkul Kiymet is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,976  in Vakif Menkul Kiymet on September 23, 2024 and sell it today you would lose (14.00) from holding Vakif Menkul Kiymet or give up 0.71% of portfolio value over 90 days.

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

Burcelik Vana Sanayi  vs.  Vakif Menkul Kiymet

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.

Vakif Menkul Kiymet

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Burcelik Vana and Vakif Menkul

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

The idea behind Burcelik Vana Sanayi and Vakif Menkul Kiymet 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.