Correlation Between Eregli Demir and Nasmed Ozel

Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Nasmed Ozel 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 Eregli Demir and Nasmed Ozel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eregli Demir ve and Nasmed Ozel Saglik, you can compare the effects of market volatilities on Eregli Demir and Nasmed Ozel 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 Eregli Demir with a short position of Nasmed Ozel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Nasmed Ozel.

Diversification Opportunities for Eregli Demir and Nasmed Ozel

0.69

Correlation Coefficient

Eregli Demir  Nasmed Ozel

Poor diversification

The 3 months correlation between Eregli and Nasmed is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Nasmed Ozel Saglik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmed Ozel Saglik and Eregli Demir 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 Eregli Demir ve are associated (or correlated) with Nasmed Ozel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmed Ozel Saglik has no effect on the direction of Eregli Demir i.e., Eregli Demir and Nasmed Ozel go up and down completely randomly.

Pair Corralation between Eregli Demir and Nasmed Ozel

Assuming the 90 days trading horizon Eregli Demir is expected to generate 10.86 times less return on investment than Nasmed Ozel. But when comparing it to its historical volatility, Eregli Demir ve is 1.3 times less risky than Nasmed Ozel. It trades about 0.03 of its potential returns per unit of risk. Nasmed Ozel Saglik is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,340  in Nasmed Ozel Saglik on September 22, 2024 and sell it today you would earn a total of  290.00  from holding Nasmed Ozel Saglik or generate 12.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Eregli Demir ve  vs.  Nasmed Ozel Saglik

Eregli Demir ve

Risk-Adjusted Performance

1 of 100

Weak

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

Nasmed Ozel Saglik

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasmed Ozel Saglik are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Nasmed Ozel demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eregli Demir and Nasmed Ozel

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

The idea behind Eregli Demir ve and Nasmed Ozel Saglik 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.