Correlation Between Global Yatirim and IZDEMIR Enerji

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

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

Diversification Opportunities for Global Yatirim and IZDEMIR Enerji

0.03

Correlation Coefficient

Global Yatirim  IZDEMIR Enerji

Significant diversification

The 3 months correlation between Global and IZDEMIR is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Global Yatirim Holding and IZDEMIR Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IZDEMIR Enerji Elektrik and Global 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 Global Yatirim Holding are associated (or correlated) with IZDEMIR Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IZDEMIR Enerji Elektrik has no effect on the direction of Global Yatirim i.e., Global Yatirim and IZDEMIR Enerji go up and down completely randomly.

Pair Corralation between Global Yatirim and IZDEMIR Enerji

Assuming the 90 days trading horizon Global Yatirim Holding is expected to generate 0.9 times more return on investment than IZDEMIR Enerji. However, Global Yatirim Holding is 1.12 times less risky than IZDEMIR Enerji. It trades about 0.08 of its potential returns per unit of risk. IZDEMIR Enerji Elektrik is currently generating about 0.03 per unit of risk. If you would invest  1,669  in Global Yatirim Holding on October 22, 2024 and sell it today you would earn a total of  173.00  from holding Global Yatirim Holding or generate 10.37% return on investment over 90 days.

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

Global Yatirim Holding  vs.  IZDEMIR Enerji Elektrik

Global Yatirim Holding

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Yatirim Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Global Yatirim may actually be approaching a critical reversion point that can send shares even higher in February 2025.

IZDEMIR Enerji Elektrik

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IZDEMIR Enerji Elektrik are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, IZDEMIR Enerji is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Global Yatirim and IZDEMIR Enerji

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

The idea behind Global Yatirim Holding and IZDEMIR Enerji Elektrik 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.