Correlation Between Gubre Fabrikalari and Ege Endustri

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

Diversification Opportunities for Gubre Fabrikalari and Ege Endustri

0.19

Correlation Coefficient

Gubre Fabrikalari  Ege Endustri

Average diversification

The 3 months correlation between Gubre and Ege is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gubre Fabrikalari TAS and Ege Endustri ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Endustri ve 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 Ege Endustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Endustri ve has no effect on the direction of Gubre Fabrikalari i.e., Gubre Fabrikalari and Ege Endustri go up and down completely randomly.

Pair Corralation between Gubre Fabrikalari and Ege Endustri

Assuming the 90 days trading horizon Gubre Fabrikalari TAS is expected to generate 0.96 times more return on investment than Ege Endustri. However, Gubre Fabrikalari TAS is 1.04 times less risky than Ege Endustri. It trades about 0.08 of its potential returns per unit of risk. Ege Endustri ve is currently generating about 0.01 per unit of risk. If you would invest  16,910  in Gubre Fabrikalari TAS on September 25, 2024 and sell it today you would earn a total of  10,965  from holding Gubre Fabrikalari TAS or generate 64.84% return on investment over 90 days.

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

Gubre Fabrikalari TAS  vs.  Ege Endustri ve

Gubre Fabrikalari TAS

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gubre Fabrikalari TAS are ranked lower than 15 (%) 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.

Ege Endustri ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ege Endustri ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Ege Endustri is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Gubre Fabrikalari and Ege Endustri

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

The idea behind Gubre Fabrikalari TAS and Ege Endustri ve 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.