Correlation Between Eminis Ambalaj and Sodas Sodyum

Can any of the company-specific risk be diversified away by investing in both Eminis Ambalaj and Sodas Sodyum 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 Sodas Sodyum 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 Sodas Sodyum Sanayi, you can compare the effects of market volatilities on Eminis Ambalaj and Sodas Sodyum 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 Sodas Sodyum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eminis Ambalaj and Sodas Sodyum.

Diversification Opportunities for Eminis Ambalaj and Sodas Sodyum

-0.57

Correlation Coefficient

Eminis Ambalaj  Sodas Sodyum

Excellent diversification

The 3 months correlation between Eminis and Sodas is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Eminis Ambalaj Sanayi and Sodas Sodyum Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sodas Sodyum 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 Sodas Sodyum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sodas Sodyum Sanayi has no effect on the direction of Eminis Ambalaj i.e., Eminis Ambalaj and Sodas Sodyum go up and down completely randomly.

Pair Corralation between Eminis Ambalaj and Sodas Sodyum

Assuming the 90 days trading horizon Eminis Ambalaj Sanayi is expected to generate 1.99 times more return on investment than Sodas Sodyum. However, Eminis Ambalaj is 1.99 times more volatile than Sodas Sodyum Sanayi. It trades about 0.1 of its potential returns per unit of risk. Sodas Sodyum Sanayi is currently generating about -0.2 per unit of risk. If you would invest  27,500  in Eminis Ambalaj Sanayi on December 25, 2024 and sell it today you would earn a total of  6,600  from holding Eminis Ambalaj Sanayi or generate 24.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eminis Ambalaj Sanayi  vs.  Sodas Sodyum Sanayi

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 8 (%) 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.

Sodas Sodyum Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sodas Sodyum Sanayi 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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Eminis Ambalaj and Sodas Sodyum

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

The idea behind Eminis Ambalaj Sanayi and Sodas Sodyum 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.