Correlation Between Is Finansal and Deva Holding

Can any of the company-specific risk be diversified away by investing in both Is Finansal and Deva 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 Is Finansal and Deva Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Is Finansal Kiralama and Deva Holding AS, you can compare the effects of market volatilities on Is Finansal and Deva 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 Is Finansal with a short position of Deva Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Is Finansal and Deva Holding.

Diversification Opportunities for Is Finansal and Deva Holding

0.73

Correlation Coefficient

Is Finansal  Deva Holding

Poor diversification

The 3 months correlation between ISFIN and Deva is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Is Finansal Kiralama and Deva Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deva Holding AS and Is Finansal 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 Is Finansal Kiralama are associated (or correlated) with Deva Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deva Holding AS has no effect on the direction of Is Finansal i.e., Is Finansal and Deva Holding go up and down completely randomly.

Pair Corralation between Is Finansal and Deva Holding

Assuming the 90 days trading horizon Is Finansal Kiralama is expected to generate 0.95 times more return on investment than Deva Holding. However, Is Finansal Kiralama is 1.06 times less risky than Deva Holding. It trades about 0.2 of its potential returns per unit of risk. Deva Holding AS is currently generating about 0.12 per unit of risk. If you would invest  1,135  in Is Finansal Kiralama on September 25, 2024 and sell it today you would earn a total of  92.00  from holding Is Finansal Kiralama or generate 8.11% return on investment over 90 days.

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

Is Finansal Kiralama  vs.  Deva Holding AS

Is Finansal Kiralama

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Is Finansal Kiralama are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Is Finansal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Deva Holding AS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deva Holding AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Deva Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Is Finansal and Deva Holding

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

The idea behind Is Finansal Kiralama and Deva 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.