Correlation Between Desa Deri and Flap Kongre

Can any of the company-specific risk be diversified away by investing in both Desa Deri and Flap Kongre 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 Flap Kongre 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 Flap Kongre Toplanti, you can compare the effects of market volatilities on Desa Deri and Flap Kongre 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 Flap Kongre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desa Deri and Flap Kongre.

Diversification Opportunities for Desa Deri and Flap Kongre

-0.2

Correlation Coefficient

Desa Deri  Flap Kongre

Good diversification

The 3 months correlation between Desa and Flap is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Desa Deri Sanayi and Flap Kongre Toplanti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flap Kongre Toplanti 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 Flap Kongre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flap Kongre Toplanti has no effect on the direction of Desa Deri i.e., Desa Deri and Flap Kongre go up and down completely randomly.

Pair Corralation between Desa Deri and Flap Kongre

Assuming the 90 days trading horizon Desa Deri Sanayi is expected to generate 3.87 times more return on investment than Flap Kongre. However, Desa Deri is 3.87 times more volatile than Flap Kongre Toplanti. It trades about 0.04 of its potential returns per unit of risk. Flap Kongre Toplanti is currently generating about 0.02 per unit of risk. If you would invest  1,183  in Desa Deri Sanayi on October 4, 2024 and sell it today you would earn a total of  953.00  from holding Desa Deri Sanayi or generate 80.56% return on investment over 90 days.

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

Desa Deri Sanayi  vs.  Flap Kongre Toplanti

Desa Deri Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Desa Deri Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Desa Deri is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Flap Kongre Toplanti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flap Kongre Toplanti has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Desa Deri and Flap Kongre

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

The idea behind Desa Deri Sanayi and Flap Kongre Toplanti 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.