Correlation Between Nasmed Ozel and Mercan Kimya

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Can any of the company-specific risk be diversified away by investing in both Nasmed Ozel and Mercan Kimya 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 Nasmed Ozel and Mercan Kimya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasmed Ozel Saglik and Mercan Kimya Sanayi, you can compare the effects of market volatilities on Nasmed Ozel and Mercan Kimya 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 Nasmed Ozel with a short position of Mercan Kimya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasmed Ozel and Mercan Kimya.

Diversification Opportunities for Nasmed Ozel and Mercan Kimya

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Nasmed and Mercan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nasmed Ozel Saglik and Mercan Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercan Kimya Sanayi and Nasmed Ozel 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 Nasmed Ozel Saglik are associated (or correlated) with Mercan Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercan Kimya Sanayi has no effect on the direction of Nasmed Ozel i.e., Nasmed Ozel and Mercan Kimya go up and down completely randomly.

Pair Corralation between Nasmed Ozel and Mercan Kimya

Assuming the 90 days trading horizon Nasmed Ozel Saglik is expected to generate 1.32 times more return on investment than Mercan Kimya. However, Nasmed Ozel is 1.32 times more volatile than Mercan Kimya Sanayi. It trades about 0.24 of its potential returns per unit of risk. Mercan Kimya Sanayi is currently generating about -0.28 per unit of risk. If you would invest  2,356  in Nasmed Ozel Saglik on September 23, 2024 and sell it today you would earn a total of  274.00  from holding Nasmed Ozel Saglik or generate 11.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Nasmed Ozel Saglik  vs.  Mercan Kimya Sanayi

 Performance 
       Timeline  
Nasmed Ozel Saglik 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Nasmed Ozel Saglik are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Nasmed Ozel demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Mercan Kimya Sanayi 

Risk-Adjusted Performance

0 of 100

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

Nasmed Ozel and Mercan Kimya Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nasmed Ozel and Mercan Kimya

The main advantage of trading using opposite Nasmed Ozel and Mercan Kimya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasmed Ozel position performs unexpectedly, Mercan Kimya 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 Mercan Kimya will offset losses from the drop in Mercan Kimya's long position.
The idea behind Nasmed Ozel Saglik and Mercan Kimya 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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