Correlation Between EIS Eczacibasi and BIM Birlesik

Can any of the company-specific risk be diversified away by investing in both EIS Eczacibasi and BIM Birlesik 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 BIM Birlesik 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 BIM Birlesik Magazalar, you can compare the effects of market volatilities on EIS Eczacibasi and BIM Birlesik 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 BIM Birlesik. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIS Eczacibasi and BIM Birlesik.

Diversification Opportunities for EIS Eczacibasi and BIM Birlesik

0.59

Correlation Coefficient

EIS Eczacibasi  BIM Birlesik

Very weak diversification

The 3 months correlation between EIS and BIM is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding EIS Eczacibasi Ilac and BIM Birlesik Magazalar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIM Birlesik Magazalar 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 BIM Birlesik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIM Birlesik Magazalar has no effect on the direction of EIS Eczacibasi i.e., EIS Eczacibasi and BIM Birlesik go up and down completely randomly.

Pair Corralation between EIS Eczacibasi and BIM Birlesik

Assuming the 90 days trading horizon EIS Eczacibasi Ilac is expected to under-perform the BIM Birlesik. But the stock apears to be less risky and, when comparing its historical volatility, EIS Eczacibasi Ilac is 1.01 times less risky than BIM Birlesik. The stock trades about -0.13 of its potential returns per unit of risk. The BIM Birlesik Magazalar is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  53,187  in BIM Birlesik Magazalar on October 13, 2024 and sell it today you would lose (887.00) from holding BIM Birlesik Magazalar or give up 1.67% of portfolio value over 90 days.

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

EIS Eczacibasi Ilac  vs.  BIM Birlesik Magazalar

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.

BIM Birlesik Magazalar

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BIM Birlesik Magazalar are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, BIM Birlesik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EIS Eczacibasi and BIM Birlesik

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

The idea behind EIS Eczacibasi Ilac and BIM Birlesik Magazalar 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.