Correlation Between FMC and Ekiz Kimya

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

By analyzing existing cross correlation between FMC Corporation and Ekiz Kimya Sanayi, you can compare the effects of market volatilities on FMC and Ekiz Kimya 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 FMC with a short position of Ekiz Kimya. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMC and Ekiz Kimya.

Diversification Opportunities for FMC and Ekiz Kimya

-0.01

Correlation Coefficient

FMC  Ekiz Kimya

Good diversification

The 3 months correlation between FMC and Ekiz is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp. and Ekiz Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekiz Kimya Sanayi and FMC 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 FMC Corporation are associated (or correlated) with Ekiz Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekiz Kimya Sanayi has no effect on the direction of FMC i.e., FMC and Ekiz Kimya go up and down completely randomly.

Pair Corralation between FMC and Ekiz Kimya

Considering the 90-day investment horizon FMC Corporation is expected to under-perform the Ekiz Kimya. In addition to that, FMC is 1.12 times more volatile than Ekiz Kimya Sanayi. It trades about -0.4 of its total potential returns per unit of risk. Ekiz Kimya Sanayi is currently generating about -0.04 per unit of volatility. If you would invest  5,760  in Ekiz Kimya Sanayi on October 4, 2024 and sell it today you would lose (120.00) from holding Ekiz Kimya Sanayi or give up 2.08% of portfolio value over 90 days.

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

FMC Corp.  vs.  Ekiz Kimya Sanayi

FMC Corporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FMC Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Ekiz Kimya Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekiz Kimya Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ekiz Kimya is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FMC and Ekiz Kimya

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

The idea behind FMC Corporation and Ekiz Kimya Sanayi 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.