Correlation Between Desa Deri and Biotrend Cevre

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

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

Diversification Opportunities for Desa Deri and Biotrend Cevre

-0.34

Correlation Coefficient

Desa Deri  Biotrend Cevre

Very good diversification

The 3 months correlation between Desa and Biotrend is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Desa Deri Sanayi 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 Desa Deri 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 Desa Deri Sanayi 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 Desa Deri i.e., Desa Deri and Biotrend Cevre go up and down completely randomly.

Pair Corralation between Desa Deri and Biotrend Cevre

Assuming the 90 days trading horizon Desa Deri is expected to generate 1.82 times less return on investment than Biotrend Cevre. But when comparing it to its historical volatility, Desa Deri Sanayi is 1.09 times less risky than Biotrend Cevre. It trades about 0.07 of its potential returns per unit of risk. Biotrend Cevre ve is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,485  in Biotrend Cevre ve on October 2, 2024 and sell it today you would earn a total of  278.00  from holding Biotrend Cevre ve or generate 18.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Desa Deri Sanayi  vs.  Biotrend Cevre ve

Desa Deri Sanayi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Desa Deri Sanayi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Desa Deri may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Biotrend Cevre ve

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biotrend Cevre ve are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Biotrend Cevre demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Desa Deri and Biotrend Cevre

The main advantage of trading using opposite Desa Deri and Biotrend Cevre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desa Deri 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 Desa Deri Sanayi 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..