Correlation Between Hektas Ticaret and Gubre Fabrikalari

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

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

Diversification Opportunities for Hektas Ticaret and Gubre Fabrikalari

0.3

Correlation Coefficient

Hektas Ticaret  Gubre Fabrikalari

Weak diversification

The 3 months correlation between Hektas and Gubre is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hektas Ticaret TAS and Gubre Fabrikalari TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gubre Fabrikalari TAS and Hektas Ticaret 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 Hektas Ticaret TAS are associated (or correlated) with Gubre Fabrikalari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gubre Fabrikalari TAS has no effect on the direction of Hektas Ticaret i.e., Hektas Ticaret and Gubre Fabrikalari go up and down completely randomly.

Pair Corralation between Hektas Ticaret and Gubre Fabrikalari

Assuming the 90 days trading horizon Hektas Ticaret TAS is expected to under-perform the Gubre Fabrikalari. In addition to that, Hektas Ticaret is 1.13 times more volatile than Gubre Fabrikalari TAS. It trades about -0.13 of its total potential returns per unit of risk. Gubre Fabrikalari TAS is currently generating about 0.59 per unit of volatility. If you would invest  22,250  in Gubre Fabrikalari TAS on September 25, 2024 and sell it today you would earn a total of  5,425  from holding Gubre Fabrikalari TAS or generate 24.38% return on investment over 90 days.

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

Hektas Ticaret TAS  vs.  Gubre Fabrikalari TAS

Hektas Ticaret TAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hektas Ticaret TAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 uncertain forward indicators, Gubre Fabrikalari demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hektas Ticaret and Gubre Fabrikalari

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

The idea behind Hektas Ticaret TAS and Gubre Fabrikalari TAS 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.