Correlation Between China Overseas and Anadolu Efes

Can any of the company-specific risk be diversified away by investing in both China Overseas and Anadolu Efes 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 China Overseas and Anadolu Efes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Overseas Land and Anadolu Efes Biracilik, you can compare the effects of market volatilities on China Overseas and Anadolu Efes 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 China Overseas with a short position of Anadolu Efes. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Overseas and Anadolu Efes.

Diversification Opportunities for China Overseas and Anadolu Efes

-0.32

Correlation Coefficient

China Overseas  Anadolu Efes

Very good diversification

The 3 months correlation between China and Anadolu is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding China Overseas Land and Anadolu Efes Biracilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadolu Efes Biracilik and China Overseas 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 China Overseas Land are associated (or correlated) with Anadolu Efes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anadolu Efes Biracilik has no effect on the direction of China Overseas i.e., China Overseas and Anadolu Efes go up and down completely randomly.

Pair Corralation between China Overseas and Anadolu Efes

Assuming the 90 days horizon China Overseas Land is expected to generate 0.46 times more return on investment than Anadolu Efes. However, China Overseas Land is 2.17 times less risky than Anadolu Efes. It trades about -0.14 of its potential returns per unit of risk. Anadolu Efes Biracilik is currently generating about -0.3 per unit of risk. If you would invest  820.00  in China Overseas Land on October 14, 2024 and sell it today you would lose (50.00) from holding China Overseas Land or give up 6.1% of portfolio value over 90 days.

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

China Overseas Land  vs.  Anadolu Efes Biracilik

China Overseas Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Overseas Land has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Anadolu Efes Biracilik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anadolu Efes Biracilik has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with China Overseas and Anadolu Efes

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

The idea behind China Overseas Land and Anadolu Efes Biracilik 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.