Correlation Between Euro Menkul and Galatasaray Sportif

Can any of the company-specific risk be diversified away by investing in both Euro Menkul and Galatasaray Sportif 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 Euro Menkul and Galatasaray Sportif into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Euro Menkul Kiymet and Galatasaray Sportif Sinai, you can compare the effects of market volatilities on Euro Menkul and Galatasaray Sportif 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 Euro Menkul with a short position of Galatasaray Sportif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euro Menkul and Galatasaray Sportif.

Diversification Opportunities for Euro Menkul and Galatasaray Sportif

-0.59

Correlation Coefficient

Euro Menkul  Galatasaray Sportif

Excellent diversification

The 3 months correlation between Euro and Galatasaray is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Euro Menkul Kiymet and Galatasaray Sportif Sinai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galatasaray Sportif Sinai and Euro Menkul 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 Euro Menkul Kiymet are associated (or correlated) with Galatasaray Sportif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galatasaray Sportif Sinai has no effect on the direction of Euro Menkul i.e., Euro Menkul and Galatasaray Sportif go up and down completely randomly.

Pair Corralation between Euro Menkul and Galatasaray Sportif

Assuming the 90 days trading horizon Euro Menkul Kiymet is expected to generate 2.51 times more return on investment than Galatasaray Sportif. However, Euro Menkul is 2.51 times more volatile than Galatasaray Sportif Sinai. It trades about 0.3 of its potential returns per unit of risk. Galatasaray Sportif Sinai is currently generating about -0.04 per unit of risk. If you would invest  1,025  in Euro Menkul Kiymet on October 11, 2024 and sell it today you would earn a total of  393.00  from holding Euro Menkul Kiymet or generate 38.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Euro Menkul Kiymet  vs.  Galatasaray Sportif Sinai

Euro Menkul Kiymet

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Euro Menkul Kiymet are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Euro Menkul unveiled solid returns over the last few months and may actually be approaching a breakup point.

Galatasaray Sportif Sinai

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Euro Menkul and Galatasaray Sportif

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

The idea behind Euro Menkul Kiymet and Galatasaray Sportif Sinai 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.