Correlation Between EIS Eczacibasi and Alkim Alkali

Can any of the company-specific risk be diversified away by investing in both EIS Eczacibasi and Alkim Alkali 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 EIS Eczacibasi and Alkim Alkali into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EIS Eczacibasi Ilac and Alkim Alkali Kimya, you can compare the effects of market volatilities on EIS Eczacibasi and Alkim Alkali 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 EIS Eczacibasi with a short position of Alkim Alkali. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIS Eczacibasi and Alkim Alkali.

Diversification Opportunities for EIS Eczacibasi and Alkim Alkali

0.72

Correlation Coefficient

EIS Eczacibasi  Alkim Alkali

Poor diversification

The 3 months correlation between EIS and Alkim is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding EIS Eczacibasi Ilac and Alkim Alkali Kimya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Alkali Kimya and EIS Eczacibasi 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 EIS Eczacibasi Ilac are associated (or correlated) with Alkim Alkali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Alkali Kimya has no effect on the direction of EIS Eczacibasi i.e., EIS Eczacibasi and Alkim Alkali go up and down completely randomly.

Pair Corralation between EIS Eczacibasi and Alkim Alkali

Assuming the 90 days trading horizon EIS Eczacibasi Ilac is expected to under-perform the Alkim Alkali. But the stock apears to be less risky and, when comparing its historical volatility, EIS Eczacibasi Ilac is 1.5 times less risky than Alkim Alkali. The stock trades about -0.13 of its potential returns per unit of risk. The Alkim Alkali Kimya is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,852  in Alkim Alkali Kimya on October 13, 2024 and sell it today you would earn a total of  78.00  from holding Alkim Alkali Kimya or generate 4.21% return on investment over 90 days.

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

EIS Eczacibasi Ilac  vs.  Alkim Alkali Kimya

EIS Eczacibasi Ilac

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EIS Eczacibasi Ilac are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, EIS Eczacibasi demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Alkim Alkali Kimya

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Alkali Kimya are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Alkim Alkali demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EIS Eczacibasi and Alkim Alkali

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

The idea behind EIS Eczacibasi Ilac and Alkim Alkali Kimya 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.