Correlation Between Ekiz Kimya and Prizma Pres

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

Diversification Opportunities for Ekiz Kimya and Prizma Pres

0.43

Correlation Coefficient

Ekiz Kimya  Prizma Pres

Very weak diversification

The 3 months correlation between Ekiz and Prizma is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ekiz Kimya Sanayi and Prizma Pres Matbaacilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prizma Pres Matbaacilik 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 Prizma Pres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prizma Pres Matbaacilik has no effect on the direction of Ekiz Kimya i.e., Ekiz Kimya and Prizma Pres go up and down completely randomly.

Pair Corralation between Ekiz Kimya and Prizma Pres

Assuming the 90 days trading horizon Ekiz Kimya Sanayi is expected to generate 0.73 times more return on investment than Prizma Pres. However, Ekiz Kimya Sanayi is 1.36 times less risky than Prizma Pres. It trades about -0.07 of its potential returns per unit of risk. Prizma Pres Matbaacilik is currently generating about -0.25 per unit of risk. If you would invest  6,075  in Ekiz Kimya Sanayi on October 25, 2024 and sell it today you would lose (645.00) from holding Ekiz Kimya Sanayi or give up 10.62% 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.  Prizma Pres Matbaacilik

Ekiz Kimya Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekiz Kimya Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Prizma Pres Matbaacilik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prizma Pres Matbaacilik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Ekiz Kimya and Prizma Pres

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

The idea behind Ekiz Kimya Sanayi and Prizma Pres Matbaacilik 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.