Correlation Between Eregli Demir and Kuyas Yatirim

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

Diversification Opportunities for Eregli Demir and Kuyas Yatirim

0.24

Correlation Coefficient

Eregli Demir  Kuyas Yatirim

Modest diversification

The 3 months correlation between Eregli and Kuyas is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Kuyas Yatirim AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuyas Yatirim AS 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 Kuyas Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuyas Yatirim AS has no effect on the direction of Eregli Demir i.e., Eregli Demir and Kuyas Yatirim go up and down completely randomly.

Pair Corralation between Eregli Demir and Kuyas Yatirim

Assuming the 90 days trading horizon Eregli Demir ve is expected to generate 0.59 times more return on investment than Kuyas Yatirim. However, Eregli Demir ve is 1.71 times less risky than Kuyas Yatirim. It trades about 0.06 of its potential returns per unit of risk. Kuyas Yatirim AS is currently generating about 0.01 per unit of risk. If you would invest  1,878  in Eregli Demir ve on October 5, 2024 and sell it today you would earn a total of  572.00  from holding Eregli Demir ve or generate 30.46% return on investment over 90 days.

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

Eregli Demir ve  vs.  Kuyas Yatirim AS

Eregli Demir ve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kuyas Yatirim AS

Risk-Adjusted Performance

14 of 100

Good

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

Pair Trading with Eregli Demir and Kuyas Yatirim

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

The idea behind Eregli Demir ve and Kuyas Yatirim AS 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..