Correlation Between Eminis Ambalaj and Prizma Pres

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

Diversification Opportunities for Eminis Ambalaj and Prizma Pres

0.83

Correlation Coefficient

Eminis Ambalaj  Prizma Pres

Very poor diversification

The 3 months correlation between Eminis and Prizma is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eminis Ambalaj 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 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 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 Eminis Ambalaj i.e., Eminis Ambalaj and Prizma Pres go up and down completely randomly.

Pair Corralation between Eminis Ambalaj and Prizma Pres

Assuming the 90 days trading horizon Eminis Ambalaj is expected to generate 1.25 times less return on investment than Prizma Pres. In addition to that, Eminis Ambalaj is 1.48 times more volatile than Prizma Pres Matbaacilik. It trades about 0.1 of its total potential returns per unit of risk. Prizma Pres Matbaacilik is currently generating about 0.19 per unit of volatility. If you would invest  687.00  in Prizma Pres Matbaacilik on December 23, 2024 and sell it today you would earn a total of  248.00  from holding Prizma Pres Matbaacilik or generate 36.1% return on investment over 90 days.

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

Eminis Ambalaj Sanayi  vs.  Prizma Pres Matbaacilik

Eminis Ambalaj Sanayi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eminis Ambalaj Sanayi are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Eminis Ambalaj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Prizma Pres Matbaacilik

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prizma Pres Matbaacilik are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Prizma Pres demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eminis Ambalaj and Prizma Pres

The main advantage of trading using opposite Eminis Ambalaj and Prizma Pres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eminis Ambalaj 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 Eminis Ambalaj 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.