Correlation Between Ford and Yesil Yapi

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

By analyzing existing cross correlation between Ford Motor and Yesil Yapi Endustrisi, you can compare the effects of market volatilities on Ford and Yesil Yapi 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 Ford with a short position of Yesil Yapi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Yesil Yapi.

Diversification Opportunities for Ford and Yesil Yapi

-0.33

Correlation Coefficient

Ford  Yesil Yapi

Very good diversification

The 3 months correlation between Ford and Yesil is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Yesil Yapi Endustrisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yesil Yapi Endustrisi and Ford 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 Ford Motor are associated (or correlated) with Yesil Yapi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yesil Yapi Endustrisi has no effect on the direction of Ford i.e., Ford and Yesil Yapi go up and down completely randomly.

Pair Corralation between Ford and Yesil Yapi

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Yesil Yapi. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 2.04 times less risky than Yesil Yapi. The stock trades about -0.05 of its potential returns per unit of risk. The Yesil Yapi Endustrisi is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  155.00  in Yesil Yapi Endustrisi on October 22, 2024 and sell it today you would earn a total of  50.00  from holding Yesil Yapi Endustrisi or generate 32.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Ford Motor  vs.  Yesil Yapi Endustrisi

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Yesil Yapi Endustrisi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yesil Yapi Endustrisi are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Yesil Yapi demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and Yesil Yapi

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

The idea behind Ford Motor and Yesil Yapi Endustrisi 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.