Correlation Between Ege Endustri and Gubre Fabrikalari

Can any of the company-specific risk be diversified away by investing in both Ege Endustri and Gubre Fabrikalari 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 Ege Endustri and Gubre Fabrikalari into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ege Endustri ve and Gubre Fabrikalari TAS, you can compare the effects of market volatilities on Ege Endustri and Gubre Fabrikalari 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 Ege Endustri with a short position of Gubre Fabrikalari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Endustri and Gubre Fabrikalari.

Diversification Opportunities for Ege Endustri and Gubre Fabrikalari

-0.06

Correlation Coefficient

Ege Endustri  Gubre Fabrikalari

Good diversification

The 3 months correlation between Ege and Gubre is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve and Gubre Fabrikalari TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gubre Fabrikalari TAS and Ege Endustri 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 Ege Endustri ve are associated (or correlated) with Gubre Fabrikalari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gubre Fabrikalari TAS has no effect on the direction of Ege Endustri i.e., Ege Endustri and Gubre Fabrikalari go up and down completely randomly.

Pair Corralation between Ege Endustri and Gubre Fabrikalari

Assuming the 90 days trading horizon Ege Endustri ve is expected to generate 0.95 times more return on investment than Gubre Fabrikalari. However, Ege Endustri ve is 1.05 times less risky than Gubre Fabrikalari. It trades about 0.05 of its potential returns per unit of risk. Gubre Fabrikalari TAS is currently generating about 0.0 per unit of risk. If you would invest  572,987  in Ege Endustri ve on October 13, 2024 and sell it today you would earn a total of  404,763  from holding Ege Endustri ve or generate 70.64% return on investment over 90 days.

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

Ege Endustri ve  vs.  Gubre Fabrikalari TAS

Ege Endustri ve

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ege Endustri ve are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Ege Endustri may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gubre Fabrikalari TAS

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Gubre Fabrikalari TAS are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Gubre Fabrikalari demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ege Endustri and Gubre Fabrikalari

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

The idea behind Ege Endustri ve and Gubre Fabrikalari TAS 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.