Correlation Between Gubre Fabrikalari and Bera Holding

Can any of the company-specific risk be diversified away by investing in both Gubre Fabrikalari and Bera Holding 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 Bera Holding 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 Bera Holding AS, you can compare the effects of market volatilities on Gubre Fabrikalari and Bera Holding 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 Bera Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gubre Fabrikalari and Bera Holding.

Diversification Opportunities for Gubre Fabrikalari and Bera Holding

0.87

Correlation Coefficient

Gubre Fabrikalari  Bera Holding

Very poor diversification

The 3 months correlation between Gubre and Bera is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Gubre Fabrikalari TAS and Bera Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bera Holding AS 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 Bera Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bera Holding AS has no effect on the direction of Gubre Fabrikalari i.e., Gubre Fabrikalari and Bera Holding go up and down completely randomly.

Pair Corralation between Gubre Fabrikalari and Bera Holding

Assuming the 90 days trading horizon Gubre Fabrikalari TAS is expected to generate 1.15 times more return on investment than Bera Holding. However, Gubre Fabrikalari is 1.15 times more volatile than Bera Holding AS. It trades about 0.18 of its potential returns per unit of risk. Bera Holding AS is currently generating about -0.02 per unit of risk. If you would invest  14,780  in Gubre Fabrikalari TAS on October 13, 2024 and sell it today you would earn a total of  14,320  from holding Gubre Fabrikalari TAS or generate 96.89% return on investment over 90 days.

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

Gubre Fabrikalari TAS  vs.  Bera Holding AS

Gubre Fabrikalari TAS

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Gubre Fabrikalari TAS are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Gubre Fabrikalari demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bera Holding AS

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bera Holding AS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Bera Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gubre Fabrikalari and Bera Holding

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

The idea behind Gubre Fabrikalari TAS and Bera Holding 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.