Correlation Between Creditwest Faktoring and Smart Gunes

Can any of the company-specific risk be diversified away by investing in both Creditwest Faktoring and Smart Gunes 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 Creditwest Faktoring and Smart Gunes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Creditwest Faktoring AS and Smart Gunes Enerjisi, you can compare the effects of market volatilities on Creditwest Faktoring and Smart Gunes 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 Creditwest Faktoring with a short position of Smart Gunes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creditwest Faktoring and Smart Gunes.

Diversification Opportunities for Creditwest Faktoring and Smart Gunes

0.47

Correlation Coefficient

Creditwest Faktoring  Smart Gunes

Very weak diversification

The 3 months correlation between Creditwest and Smart is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Creditwest Faktoring AS and Smart Gunes Enerjisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Gunes Enerjisi and Creditwest Faktoring 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 Creditwest Faktoring AS are associated (or correlated) with Smart Gunes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Gunes Enerjisi has no effect on the direction of Creditwest Faktoring i.e., Creditwest Faktoring and Smart Gunes go up and down completely randomly.

Pair Corralation between Creditwest Faktoring and Smart Gunes

Assuming the 90 days trading horizon Creditwest Faktoring AS is expected to under-perform the Smart Gunes. But the stock apears to be less risky and, when comparing its historical volatility, Creditwest Faktoring AS is 1.55 times less risky than Smart Gunes. The stock trades about -0.17 of its potential returns per unit of risk. The Smart Gunes Enerjisi is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4,080  in Smart Gunes Enerjisi on October 11, 2024 and sell it today you would earn a total of  50.00  from holding Smart Gunes Enerjisi or generate 1.23% return on investment over 90 days.

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

Creditwest Faktoring AS  vs.  Smart Gunes Enerjisi

Creditwest Faktoring

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Creditwest Faktoring AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Creditwest Faktoring demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Smart Gunes Enerjisi

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Smart Gunes Enerjisi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Smart Gunes demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Creditwest Faktoring and Smart Gunes

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

The idea behind Creditwest Faktoring AS and Smart Gunes Enerjisi 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .