Correlation Between Ekiz Kimya and Ege Endustri

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

Diversification Opportunities for Ekiz Kimya and Ege Endustri

0.65

Correlation Coefficient

Ekiz Kimya  Ege Endustri

Poor diversification

The 3 months correlation between Ekiz and Ege is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ekiz Kimya Sanayi and Ege Endustri ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Endustri ve 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 Ege Endustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Endustri ve has no effect on the direction of Ekiz Kimya i.e., Ekiz Kimya and Ege Endustri go up and down completely randomly.

Pair Corralation between Ekiz Kimya and Ege Endustri

Assuming the 90 days trading horizon Ekiz Kimya Sanayi is expected to generate 1.31 times more return on investment than Ege Endustri. However, Ekiz Kimya is 1.31 times more volatile than Ege Endustri ve. It trades about -0.23 of its potential returns per unit of risk. Ege Endustri ve is currently generating about -0.31 per unit of risk. If you would invest  5,990  in Ekiz Kimya Sanayi on October 11, 2024 and sell it today you would lose (460.00) from holding Ekiz Kimya Sanayi or give up 7.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Ekiz Kimya Sanayi  vs.  Ege Endustri ve

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.

Ege Endustri ve

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ege Endustri ve are ranked lower than 4 (%) 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.

Pair Trading with Ekiz Kimya and Ege Endustri

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

The idea behind Ekiz Kimya Sanayi and Ege Endustri ve 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.