Correlation Between Dogus Otomotiv and Bursa Cimento

Can any of the company-specific risk be diversified away by investing in both Dogus Otomotiv and Bursa Cimento 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 Dogus Otomotiv and Bursa Cimento into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dogus Otomotiv Servis and Bursa Cimento Fabrikasi, you can compare the effects of market volatilities on Dogus Otomotiv and Bursa Cimento 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 Dogus Otomotiv with a short position of Bursa Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dogus Otomotiv and Bursa Cimento.

Diversification Opportunities for Dogus Otomotiv and Bursa Cimento

-0.14

Correlation Coefficient

Dogus Otomotiv  Bursa Cimento

Good diversification

The 3 months correlation between Dogus and Bursa is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dogus Otomotiv Servis and Bursa Cimento Fabrikasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bursa Cimento Fabrikasi and Dogus Otomotiv 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 Dogus Otomotiv Servis are associated (or correlated) with Bursa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bursa Cimento Fabrikasi has no effect on the direction of Dogus Otomotiv i.e., Dogus Otomotiv and Bursa Cimento go up and down completely randomly.

Pair Corralation between Dogus Otomotiv and Bursa Cimento

Assuming the 90 days trading horizon Dogus Otomotiv Servis is expected to generate 1.32 times more return on investment than Bursa Cimento. However, Dogus Otomotiv is 1.32 times more volatile than Bursa Cimento Fabrikasi. It trades about 0.07 of its potential returns per unit of risk. Bursa Cimento Fabrikasi is currently generating about -0.13 per unit of risk. If you would invest  20,040  in Dogus Otomotiv Servis on December 27, 2024 and sell it today you would earn a total of  2,270  from holding Dogus Otomotiv Servis or generate 11.33% return on investment over 90 days.

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

Dogus Otomotiv Servis  vs.  Bursa Cimento Fabrikasi

Dogus Otomotiv Servis

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dogus Otomotiv Servis are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Dogus Otomotiv unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bursa Cimento Fabrikasi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bursa Cimento Fabrikasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Dogus Otomotiv and Bursa Cimento

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

The idea behind Dogus Otomotiv Servis and Bursa Cimento Fabrikasi 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.