Correlation Between Eminis Ambalaj and Ekiz Kimya

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

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

Diversification Opportunities for Eminis Ambalaj and Ekiz Kimya

0.33

Correlation Coefficient

Eminis Ambalaj  Ekiz Kimya

Weak diversification

The 3 months correlation between Eminis and Ekiz is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eminis Ambalaj Sanayi and Ekiz Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekiz Kimya Sanayi and Eminis Ambalaj 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 Eminis Ambalaj Sanayi are associated (or correlated) with Ekiz Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekiz Kimya Sanayi has no effect on the direction of Eminis Ambalaj i.e., Eminis Ambalaj and Ekiz Kimya go up and down completely randomly.

Pair Corralation between Eminis Ambalaj and Ekiz Kimya

Assuming the 90 days trading horizon Eminis Ambalaj Sanayi is expected to under-perform the Ekiz Kimya. In addition to that, Eminis Ambalaj is 1.94 times more volatile than Ekiz Kimya Sanayi. It trades about -0.04 of its total potential returns per unit of risk. Ekiz Kimya Sanayi is currently generating about -0.07 per unit of volatility. 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eminis Ambalaj Sanayi  vs.  Ekiz Kimya Sanayi

Eminis Ambalaj Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eminis Ambalaj Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

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.

Pair Trading with Eminis Ambalaj and Ekiz Kimya

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

The idea behind Eminis Ambalaj Sanayi and Ekiz 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.