Correlation Between Gedik Yatirim and Prizma Pres

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

By analyzing existing cross correlation between Gedik Yatirim Menkul and Prizma Pres Matbaacilik, you can compare the effects of market volatilities on Gedik Yatirim and Prizma Pres 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 Gedik Yatirim with a short position of Prizma Pres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gedik Yatirim and Prizma Pres.

Diversification Opportunities for Gedik Yatirim and Prizma Pres

-0.31

Correlation Coefficient

Gedik Yatirim  Prizma Pres

Very good diversification

The 3 months correlation between Gedik and Prizma is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gedik Yatirim Menkul and Prizma Pres Matbaacilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prizma Pres Matbaacilik and Gedik Yatirim 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 Gedik Yatirim Menkul are associated (or correlated) with Prizma Pres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prizma Pres Matbaacilik has no effect on the direction of Gedik Yatirim i.e., Gedik Yatirim and Prizma Pres go up and down completely randomly.

Pair Corralation between Gedik Yatirim and Prizma Pres

Assuming the 90 days trading horizon Gedik Yatirim Menkul is expected to generate 0.71 times more return on investment than Prizma Pres. However, Gedik Yatirim Menkul is 1.4 times less risky than Prizma Pres. It trades about 0.19 of its potential returns per unit of risk. Prizma Pres Matbaacilik is currently generating about -0.13 per unit of risk. If you would invest  619.00  in Gedik Yatirim Menkul on September 12, 2024 and sell it today you would earn a total of  185.00  from holding Gedik Yatirim Menkul or generate 29.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gedik Yatirim Menkul  vs.  Prizma Pres Matbaacilik

Gedik Yatirim Menkul

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gedik Yatirim Menkul are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gedik Yatirim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Prizma Pres Matbaacilik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prizma Pres Matbaacilik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Gedik Yatirim and Prizma Pres

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

The idea behind Gedik Yatirim Menkul and Prizma Pres Matbaacilik 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.