Correlation Between Ege Endustri and Kontrolmatik Teknoloji

Can any of the company-specific risk be diversified away by investing in both Ege Endustri and Kontrolmatik Teknoloji 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 Kontrolmatik Teknoloji 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 Kontrolmatik Teknoloji Enerji, you can compare the effects of market volatilities on Ege Endustri and Kontrolmatik Teknoloji 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 Kontrolmatik Teknoloji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Endustri and Kontrolmatik Teknoloji.

Diversification Opportunities for Ege Endustri and Kontrolmatik Teknoloji

0.74

Correlation Coefficient

Ege Endustri  Kontrolmatik Teknoloji

Poor diversification

The 3 months correlation between Ege and Kontrolmatik is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve and Kontrolmatik Teknoloji Enerji in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontrolmatik Teknoloji 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 Kontrolmatik Teknoloji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontrolmatik Teknoloji has no effect on the direction of Ege Endustri i.e., Ege Endustri and Kontrolmatik Teknoloji go up and down completely randomly.

Pair Corralation between Ege Endustri and Kontrolmatik Teknoloji

Assuming the 90 days trading horizon Ege Endustri is expected to generate 1.8 times less return on investment than Kontrolmatik Teknoloji. But when comparing it to its historical volatility, Ege Endustri ve is 2.78 times less risky than Kontrolmatik Teknoloji. It trades about 0.04 of its potential returns per unit of risk. Kontrolmatik Teknoloji Enerji is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5,092  in Kontrolmatik Teknoloji Enerji on September 23, 2024 and sell it today you would lose (1,092) from holding Kontrolmatik Teknoloji Enerji or give up 21.45% of portfolio value over 90 days.

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

Ege Endustri ve  vs.  Kontrolmatik Teknoloji Enerji

Ege Endustri ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ege Endustri ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Ege Endustri is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Kontrolmatik Teknoloji

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kontrolmatik Teknoloji Enerji has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Ege Endustri and Kontrolmatik Teknoloji

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

The idea behind Ege Endustri ve and Kontrolmatik Teknoloji Enerji 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.