Correlation Between Enerjisa Enerji and Kafein Yazilim

Can any of the company-specific risk be diversified away by investing in both Enerjisa Enerji and Kafein Yazilim 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 Enerjisa Enerji and Kafein Yazilim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enerjisa Enerji AS and Kafein Yazilim, you can compare the effects of market volatilities on Enerjisa Enerji and Kafein Yazilim 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 Enerjisa Enerji with a short position of Kafein Yazilim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerjisa Enerji and Kafein Yazilim.

Diversification Opportunities for Enerjisa Enerji and Kafein Yazilim

-0.25

Correlation Coefficient

Enerjisa Enerji  Kafein Yazilim

Very good diversification

The 3 months correlation between Enerjisa and Kafein is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Enerjisa Enerji AS and Kafein Yazilim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kafein Yazilim and Enerjisa Enerji 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 Enerjisa Enerji AS are associated (or correlated) with Kafein Yazilim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kafein Yazilim has no effect on the direction of Enerjisa Enerji i.e., Enerjisa Enerji and Kafein Yazilim go up and down completely randomly.

Pair Corralation between Enerjisa Enerji and Kafein Yazilim

Assuming the 90 days trading horizon Enerjisa Enerji is expected to generate 1.95 times less return on investment than Kafein Yazilim. But when comparing it to its historical volatility, Enerjisa Enerji AS is 1.51 times less risky than Kafein Yazilim. It trades about 0.06 of its potential returns per unit of risk. Kafein Yazilim is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,870  in Kafein Yazilim on October 11, 2024 and sell it today you would earn a total of  6,595  from holding Kafein Yazilim or generate 229.79% return on investment over 90 days.

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

Enerjisa Enerji AS  vs.  Kafein Yazilim

Enerjisa Enerji AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enerjisa Enerji AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Enerjisa Enerji demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Kafein Yazilim

Risk-Adjusted Performance

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kafein Yazilim are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kafein Yazilim may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Enerjisa Enerji and Kafein Yazilim

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

The idea behind Enerjisa Enerji AS and Kafein Yazilim 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.