Correlation Between Derimod Konfeksiyon and Biotrend Cevre

Can any of the company-specific risk be diversified away by investing in both Derimod Konfeksiyon and Biotrend Cevre 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 Derimod Konfeksiyon and Biotrend Cevre into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Derimod Konfeksiyon Ayakkabi and Biotrend Cevre ve, you can compare the effects of market volatilities on Derimod Konfeksiyon and Biotrend Cevre 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 Derimod Konfeksiyon with a short position of Biotrend Cevre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Derimod Konfeksiyon and Biotrend Cevre.

Diversification Opportunities for Derimod Konfeksiyon and Biotrend Cevre

-0.31

Correlation Coefficient

Derimod Konfeksiyon  Biotrend Cevre

Very good diversification

The 3 months correlation between Derimod and Biotrend is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Derimod Konfeksiyon Ayakkabi and Biotrend Cevre ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotrend Cevre ve and Derimod Konfeksiyon 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 Derimod Konfeksiyon Ayakkabi are associated (or correlated) with Biotrend Cevre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotrend Cevre ve has no effect on the direction of Derimod Konfeksiyon i.e., Derimod Konfeksiyon and Biotrend Cevre go up and down completely randomly.

Pair Corralation between Derimod Konfeksiyon and Biotrend Cevre

Assuming the 90 days trading horizon Derimod Konfeksiyon Ayakkabi is expected to generate 1.72 times more return on investment than Biotrend Cevre. However, Derimod Konfeksiyon is 1.72 times more volatile than Biotrend Cevre ve. It trades about 0.29 of its potential returns per unit of risk. Biotrend Cevre ve is currently generating about 0.04 per unit of risk. If you would invest  3,170  in Derimod Konfeksiyon Ayakkabi on October 5, 2024 and sell it today you would earn a total of  808.00  from holding Derimod Konfeksiyon Ayakkabi or generate 25.49% return on investment over 90 days.

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

Derimod Konfeksiyon Ayakkabi  vs.  Biotrend Cevre ve

Derimod Konfeksiyon

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Derimod Konfeksiyon Ayakkabi are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Derimod Konfeksiyon demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Biotrend Cevre ve

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Biotrend Cevre ve are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Biotrend Cevre is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Derimod Konfeksiyon and Biotrend Cevre

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

The idea behind Derimod Konfeksiyon Ayakkabi and Biotrend Cevre ve 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.