Correlation Between Iskenderun Demir and Vestel Elektronik

Can any of the company-specific risk be diversified away by investing in both Iskenderun Demir and Vestel Elektronik 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 Iskenderun Demir and Vestel Elektronik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iskenderun Demir ve and Vestel Elektronik Sanayi, you can compare the effects of market volatilities on Iskenderun Demir and Vestel Elektronik 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 Iskenderun Demir with a short position of Vestel Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iskenderun Demir and Vestel Elektronik.

Diversification Opportunities for Iskenderun Demir and Vestel Elektronik

0.85

Correlation Coefficient

Iskenderun Demir  Vestel Elektronik

Very poor diversification

The 3 months correlation between Iskenderun and Vestel is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Iskenderun Demir ve and Vestel Elektronik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestel Elektronik Sanayi and Iskenderun Demir 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 Iskenderun Demir ve are associated (or correlated) with Vestel Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestel Elektronik Sanayi has no effect on the direction of Iskenderun Demir i.e., Iskenderun Demir and Vestel Elektronik go up and down completely randomly.

Pair Corralation between Iskenderun Demir and Vestel Elektronik

Assuming the 90 days trading horizon Iskenderun Demir ve is expected to generate 1.22 times more return on investment than Vestel Elektronik. However, Iskenderun Demir is 1.22 times more volatile than Vestel Elektronik Sanayi. It trades about 0.19 of its potential returns per unit of risk. Vestel Elektronik Sanayi is currently generating about 0.06 per unit of risk. If you would invest  3,770  in Iskenderun Demir ve on October 6, 2024 and sell it today you would earn a total of  370.00  from holding Iskenderun Demir ve or generate 9.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Iskenderun Demir ve  vs.  Vestel Elektronik Sanayi

Iskenderun Demir

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Iskenderun Demir ve are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Iskenderun Demir demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Vestel Elektronik Sanayi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vestel Elektronik Sanayi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Vestel Elektronik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iskenderun Demir and Vestel Elektronik

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

The idea behind Iskenderun Demir ve and Vestel Elektronik Sanayi 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.