Correlation Between Ekiz Kimya and Vakif Menkul

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

Diversification Opportunities for Ekiz Kimya and Vakif Menkul

0.42

Correlation Coefficient

Ekiz Kimya  Vakif Menkul

Very weak diversification

The 3 months correlation between Ekiz and Vakif is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ekiz Kimya Sanayi and Vakif Menkul Kiymet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vakif Menkul Kiymet 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 Vakif Menkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vakif Menkul Kiymet has no effect on the direction of Ekiz Kimya i.e., Ekiz Kimya and Vakif Menkul go up and down completely randomly.

Pair Corralation between Ekiz Kimya and Vakif Menkul

Assuming the 90 days trading horizon Ekiz Kimya Sanayi is expected to under-perform the Vakif Menkul. In addition to that, Ekiz Kimya is 1.38 times more volatile than Vakif Menkul Kiymet. It trades about -0.09 of its total potential returns per unit of risk. Vakif Menkul Kiymet is currently generating about -0.01 per unit of volatility. If you would invest  1,976  in Vakif Menkul Kiymet on September 23, 2024 and sell it today you would lose (14.00) from holding Vakif Menkul Kiymet or give up 0.71% 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.  Vakif Menkul Kiymet

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.

Vakif Menkul Kiymet

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ekiz Kimya and Vakif Menkul

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

The idea behind Ekiz Kimya Sanayi and Vakif Menkul Kiymet 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.