Correlation Between Galatasaray Sportif and Hedef Holdings

Can any of the company-specific risk be diversified away by investing in both Galatasaray Sportif and Hedef Holdings 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 Galatasaray Sportif and Hedef Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Galatasaray Sportif Sinai and Hedef Holdings AS, you can compare the effects of market volatilities on Galatasaray Sportif and Hedef Holdings 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 Galatasaray Sportif with a short position of Hedef Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galatasaray Sportif and Hedef Holdings.

Diversification Opportunities for Galatasaray Sportif and Hedef Holdings

-0.29

Correlation Coefficient

Galatasaray Sportif  Hedef Holdings

Very good diversification

The 3 months correlation between Galatasaray and Hedef is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Galatasaray Sportif Sinai and Hedef Holdings AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedef Holdings AS and Galatasaray Sportif 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 Galatasaray Sportif Sinai are associated (or correlated) with Hedef Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedef Holdings AS has no effect on the direction of Galatasaray Sportif i.e., Galatasaray Sportif and Hedef Holdings go up and down completely randomly.

Pair Corralation between Galatasaray Sportif and Hedef Holdings

Assuming the 90 days trading horizon Galatasaray Sportif Sinai is expected to under-perform the Hedef Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Galatasaray Sportif Sinai is 1.7 times less risky than Hedef Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Hedef Holdings AS is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  330.00  in Hedef Holdings AS on October 8, 2024 and sell it today you would earn a total of  63.00  from holding Hedef Holdings AS or generate 19.09% return on investment over 90 days.

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

Galatasaray Sportif Sinai  vs.  Hedef Holdings AS

Galatasaray Sportif Sinai

Risk-Adjusted Performance

1 of 100

Weak

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

Hedef Holdings AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hedef Holdings AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Hedef Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galatasaray Sportif and Hedef Holdings

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

The idea behind Galatasaray Sportif Sinai and Hedef Holdings AS 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 Anywhere module to track or share privately all of your investments from the convenience of any device.