Correlation Between GSD Denizcilik and Bms Birlesik

Can any of the company-specific risk be diversified away by investing in both GSD Denizcilik and Bms Birlesik 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 GSD Denizcilik and Bms Birlesik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GSD Denizcilik Gayrimenkul and Bms Birlesik Metal, you can compare the effects of market volatilities on GSD Denizcilik and Bms Birlesik 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 GSD Denizcilik with a short position of Bms Birlesik. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSD Denizcilik and Bms Birlesik.

Diversification Opportunities for GSD Denizcilik and Bms Birlesik

-0.61

Correlation Coefficient

GSD Denizcilik  Bms Birlesik

Excellent diversification

The 3 months correlation between GSD and Bms is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GSD Denizcilik Gayrimenkul and Bms Birlesik Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bms Birlesik Metal and GSD Denizcilik 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 GSD Denizcilik Gayrimenkul are associated (or correlated) with Bms Birlesik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bms Birlesik Metal has no effect on the direction of GSD Denizcilik i.e., GSD Denizcilik and Bms Birlesik go up and down completely randomly.

Pair Corralation between GSD Denizcilik and Bms Birlesik

Assuming the 90 days trading horizon GSD Denizcilik Gayrimenkul is expected to under-perform the Bms Birlesik. But the stock apears to be less risky and, when comparing its historical volatility, GSD Denizcilik Gayrimenkul is 1.33 times less risky than Bms Birlesik. The stock trades about -0.08 of its potential returns per unit of risk. The Bms Birlesik Metal is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,770  in Bms Birlesik Metal on December 21, 2024 and sell it today you would earn a total of  1,474  from holding Bms Birlesik Metal or generate 53.21% return on investment over 90 days.

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

GSD Denizcilik Gayrimenkul  vs.  Bms Birlesik Metal

GSD Denizcilik Gayri

Risk-Adjusted Performance

Very Weak

Over the last 90 days GSD Denizcilik Gayrimenkul 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.

Bms Birlesik Metal

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bms Birlesik Metal are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bms Birlesik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GSD Denizcilik and Bms Birlesik

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

The idea behind GSD Denizcilik Gayrimenkul and Bms Birlesik Metal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.