Correlation Between Ford Otomotiv and Pinar Entegre

Can any of the company-specific risk be diversified away by investing in both Ford Otomotiv and Pinar Entegre 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 Pinar Entegre 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 Pinar Entegre Et, you can compare the effects of market volatilities on Ford Otomotiv and Pinar Entegre 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 Pinar Entegre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford Otomotiv and Pinar Entegre.

Diversification Opportunities for Ford Otomotiv and Pinar Entegre

0.93

Correlation Coefficient

Ford Otomotiv  Pinar Entegre

Almost no diversification

The 3 months correlation between Ford and Pinar is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ford Otomotiv Sanayi and Pinar Entegre Et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinar Entegre Et 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 Pinar Entegre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinar Entegre Et has no effect on the direction of Ford Otomotiv i.e., Ford Otomotiv and Pinar Entegre go up and down completely randomly.

Pair Corralation between Ford Otomotiv and Pinar Entegre

Assuming the 90 days trading horizon Ford Otomotiv Sanayi is expected to under-perform the Pinar Entegre. But the stock apears to be less risky and, when comparing its historical volatility, Ford Otomotiv Sanayi is 1.11 times less risky than Pinar Entegre. The stock trades about -0.14 of its potential returns per unit of risk. The Pinar Entegre Et is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,068  in Pinar Entegre Et on December 3, 2024 and sell it today you would lose (108.00) from holding Pinar Entegre Et or give up 10.11% of portfolio value over 90 days.

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

Ford Otomotiv Sanayi  vs.  Pinar Entegre Et

Ford Otomotiv Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ford Otomotiv Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pinar Entegre Et

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pinar Entegre Et has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Ford Otomotiv and Pinar Entegre

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

The idea behind Ford Otomotiv Sanayi and Pinar Entegre Et 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.