Correlation Between Ford Otomotiv and Eczacibasi Yatirim

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

By analyzing existing cross correlation between Ford Otomotiv Sanayi and Eczacibasi Yatirim Holding, you can compare the effects of market volatilities on Ford Otomotiv and Eczacibasi 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 Ford Otomotiv with a short position of Eczacibasi Yatirim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford Otomotiv and Eczacibasi Yatirim.

Diversification Opportunities for Ford Otomotiv and Eczacibasi Yatirim

0.27

Correlation Coefficient

Ford Otomotiv  Eczacibasi Yatirim

Modest diversification

The 3 months correlation between Ford and Eczacibasi is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ford Otomotiv Sanayi and Eczacibasi Yatirim Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eczacibasi Yatirim and Ford Otomotiv 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 Otomotiv Sanayi are associated (or correlated) with Eczacibasi Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eczacibasi Yatirim has no effect on the direction of Ford Otomotiv i.e., Ford Otomotiv and Eczacibasi Yatirim go up and down completely randomly.

Pair Corralation between Ford Otomotiv and Eczacibasi Yatirim

Assuming the 90 days trading horizon Ford Otomotiv Sanayi is expected to generate 0.87 times more return on investment than Eczacibasi Yatirim. However, Ford Otomotiv Sanayi is 1.14 times less risky than Eczacibasi Yatirim. It trades about 0.05 of its potential returns per unit of risk. Eczacibasi Yatirim Holding is currently generating about 0.0 per unit of risk. If you would invest  89,922  in Ford Otomotiv Sanayi on September 23, 2024 and sell it today you would earn a total of  5,028  from holding Ford Otomotiv Sanayi or generate 5.59% return on investment over 90 days.

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

Ford Otomotiv Sanayi  vs.  Eczacibasi Yatirim Holding

Ford Otomotiv Sanayi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Otomotiv Sanayi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Ford Otomotiv may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eczacibasi Yatirim

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ford Otomotiv and Eczacibasi Yatirim

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

The idea behind Ford Otomotiv Sanayi and Eczacibasi Yatirim Holding 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.