Correlation Between Enerjisa Enerji and Zorlu Enerji

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

Diversification Opportunities for Enerjisa Enerji and Zorlu Enerji

0.78

Correlation Coefficient

Enerjisa Enerji  Zorlu Enerji

Poor diversification

The 3 months correlation between Enerjisa and Zorlu is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Enerjisa Enerji AS and Zorlu Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zorlu Enerji Elektrik 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 Zorlu Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zorlu Enerji Elektrik has no effect on the direction of Enerjisa Enerji i.e., Enerjisa Enerji and Zorlu Enerji go up and down completely randomly.

Pair Corralation between Enerjisa Enerji and Zorlu Enerji

Assuming the 90 days trading horizon Enerjisa Enerji AS is expected to under-perform the Zorlu Enerji. In addition to that, Enerjisa Enerji is 1.12 times more volatile than Zorlu Enerji Elektrik. It trades about -0.05 of its total potential returns per unit of risk. Zorlu Enerji Elektrik is currently generating about 0.06 per unit of volatility. If you would invest  431.00  in Zorlu Enerji Elektrik on September 24, 2024 and sell it today you would earn a total of  6.00  from holding Zorlu Enerji Elektrik or generate 1.39% return on investment over 90 days.

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

Enerjisa Enerji AS  vs.  Zorlu Enerji Elektrik

Enerjisa Enerji AS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enerjisa Enerji AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Enerjisa Enerji is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Zorlu Enerji Elektrik

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Enerjisa Enerji and Zorlu Enerji

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

The idea behind Enerjisa Enerji AS and Zorlu Enerji Elektrik 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.