Correlation Between Ekiz Kimya and Birlik Mensucat

Can any of the company-specific risk be diversified away by investing in both Ekiz Kimya and Birlik Mensucat 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 Ekiz Kimya and Birlik Mensucat into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ekiz Kimya Sanayi and Birlik Mensucat Ticaret, you can compare the effects of market volatilities on Ekiz Kimya and Birlik Mensucat 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 Ekiz Kimya with a short position of Birlik Mensucat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekiz Kimya and Birlik Mensucat.

Diversification Opportunities for Ekiz Kimya and Birlik Mensucat

0.4

Correlation Coefficient

Ekiz Kimya  Birlik Mensucat

Very weak diversification

The 3 months correlation between Ekiz and Birlik is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ekiz Kimya Sanayi and Birlik Mensucat Ticaret in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birlik Mensucat Ticaret and Ekiz Kimya 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 Ekiz Kimya Sanayi are associated (or correlated) with Birlik Mensucat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birlik Mensucat Ticaret has no effect on the direction of Ekiz Kimya i.e., Ekiz Kimya and Birlik Mensucat go up and down completely randomly.

Pair Corralation between Ekiz Kimya and Birlik Mensucat

Assuming the 90 days trading horizon Ekiz Kimya Sanayi is expected to generate 0.43 times more return on investment than Birlik Mensucat. However, Ekiz Kimya Sanayi is 2.3 times less risky than Birlik Mensucat. It trades about -0.24 of its potential returns per unit of risk. Birlik Mensucat Ticaret is currently generating about -0.16 per unit of risk. If you would invest  6,000  in Ekiz Kimya Sanayi on October 10, 2024 and sell it today you would lose (470.00) from holding Ekiz Kimya Sanayi or give up 7.83% of portfolio value over 90 days.

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

Ekiz Kimya Sanayi  vs.  Birlik Mensucat Ticaret

Ekiz Kimya Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ekiz Kimya Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ekiz Kimya is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Birlik Mensucat Ticaret

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Birlik Mensucat Ticaret are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Birlik Mensucat demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ekiz Kimya and Birlik Mensucat

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

The idea behind Ekiz Kimya Sanayi and Birlik Mensucat Ticaret 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.