Correlation Between Ege Endustri and Ozerden Plastik

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

Diversification Opportunities for Ege Endustri and Ozerden Plastik

0.19

Correlation Coefficient

Ege Endustri  Ozerden Plastik

Average diversification

The 3 months correlation between Ege and Ozerden is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve and Ozerden Plastik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ozerden Plastik Sanayi 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 Ozerden Plastik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ozerden Plastik Sanayi has no effect on the direction of Ege Endustri i.e., Ege Endustri and Ozerden Plastik go up and down completely randomly.

Pair Corralation between Ege Endustri and Ozerden Plastik

Assuming the 90 days trading horizon Ege Endustri ve is expected to under-perform the Ozerden Plastik. But the stock apears to be less risky and, when comparing its historical volatility, Ege Endustri ve is 1.2 times less risky than Ozerden Plastik. The stock trades about -0.11 of its potential returns per unit of risk. The Ozerden Plastik Sanayi is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  851.00  in Ozerden Plastik Sanayi on September 22, 2024 and sell it today you would earn a total of  23.00  from holding Ozerden Plastik Sanayi or generate 2.7% return on investment over 90 days.

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

Ege Endustri ve  vs.  Ozerden Plastik Sanayi

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.

Ozerden Plastik Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ege Endustri and Ozerden Plastik

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

The idea behind Ege Endustri ve and Ozerden Plastik Sanayi 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.