Correlation Between Gubre Fabrikalari and Aksa Enerji

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

By analyzing existing cross correlation between Gubre Fabrikalari TAS and Aksa Enerji Uretim, you can compare the effects of market volatilities on Gubre Fabrikalari and Aksa 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 Gubre Fabrikalari with a short position of Aksa Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gubre Fabrikalari and Aksa Enerji.

Diversification Opportunities for Gubre Fabrikalari and Aksa Enerji

0.26

Correlation Coefficient

Gubre Fabrikalari  Aksa Enerji

Modest diversification

The 3 months correlation between Gubre and Aksa is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Gubre Fabrikalari TAS and Aksa Enerji Uretim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aksa Enerji Uretim and Gubre Fabrikalari 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 Gubre Fabrikalari TAS are associated (or correlated) with Aksa Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aksa Enerji Uretim has no effect on the direction of Gubre Fabrikalari i.e., Gubre Fabrikalari and Aksa Enerji go up and down completely randomly.

Pair Corralation between Gubre Fabrikalari and Aksa Enerji

Assuming the 90 days trading horizon Gubre Fabrikalari TAS is expected to generate 1.19 times more return on investment than Aksa Enerji. However, Gubre Fabrikalari is 1.19 times more volatile than Aksa Enerji Uretim. It trades about 0.67 of its potential returns per unit of risk. Aksa Enerji Uretim is currently generating about 0.08 per unit of risk. If you would invest  22,250  in Gubre Fabrikalari TAS on September 24, 2024 and sell it today you would earn a total of  5,850  from holding Gubre Fabrikalari TAS or generate 26.29% return on investment over 90 days.

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

Gubre Fabrikalari TAS  vs.  Aksa Enerji Uretim

Gubre Fabrikalari TAS

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gubre Fabrikalari TAS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gubre Fabrikalari demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Aksa Enerji Uretim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aksa Enerji Uretim has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

Pair Trading with Gubre Fabrikalari and Aksa Enerji

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

The idea behind Gubre Fabrikalari TAS and Aksa Enerji Uretim 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.