Correlation Between Gentas Genel and Bosch Fren

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

By analyzing existing cross correlation between Gentas Genel Metal and Bosch Fren Sistemleri, you can compare the effects of market volatilities on Gentas Genel and Bosch Fren 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 Gentas Genel with a short position of Bosch Fren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentas Genel and Bosch Fren.

Diversification Opportunities for Gentas Genel and Bosch Fren

-0.24

Correlation Coefficient

Gentas Genel  Bosch Fren

Very good diversification

The 3 months correlation between Gentas and Bosch is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Gentas Genel Metal and Bosch Fren Sistemleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosch Fren Sistemleri and Gentas Genel 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 Gentas Genel Metal are associated (or correlated) with Bosch Fren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosch Fren Sistemleri has no effect on the direction of Gentas Genel i.e., Gentas Genel and Bosch Fren go up and down completely randomly.

Pair Corralation between Gentas Genel and Bosch Fren

Assuming the 90 days trading horizon Gentas Genel is expected to generate 10.9 times less return on investment than Bosch Fren. But when comparing it to its historical volatility, Gentas Genel Metal is 13.49 times less risky than Bosch Fren. It trades about 0.06 of its potential returns per unit of risk. Bosch Fren Sistemleri is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  41,841  in Bosch Fren Sistemleri on September 30, 2024 and sell it today you would earn a total of  28,859  from holding Bosch Fren Sistemleri or generate 68.97% return on investment over 90 days.

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

Gentas Genel Metal  vs.  Bosch Fren Sistemleri

Gentas Genel Metal

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gentas Genel Metal are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gentas Genel demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bosch Fren Sistemleri

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bosch Fren Sistemleri are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Bosch Fren is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Gentas Genel and Bosch Fren

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

The idea behind Gentas Genel Metal and Bosch Fren Sistemleri 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.