Correlation Between IZDEMIR Enerji and AG Anadolu

Can any of the company-specific risk be diversified away by investing in both IZDEMIR Enerji and AG Anadolu 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 IZDEMIR Enerji and AG Anadolu into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IZDEMIR Enerji Elektrik and AG Anadolu Group, you can compare the effects of market volatilities on IZDEMIR Enerji and AG Anadolu 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 IZDEMIR Enerji with a short position of AG Anadolu. Check out your portfolio center. Please also check ongoing floating volatility patterns of IZDEMIR Enerji and AG Anadolu.

Diversification Opportunities for IZDEMIR Enerji and AG Anadolu

0.35

Correlation Coefficient

IZDEMIR Enerji  AG Anadolu

Weak diversification

The 3 months correlation between IZDEMIR and AGHOL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding IZDEMIR Enerji Elektrik and AG Anadolu Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Anadolu Group and IZDEMIR Enerji 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 IZDEMIR Enerji Elektrik are associated (or correlated) with AG Anadolu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Anadolu Group has no effect on the direction of IZDEMIR Enerji i.e., IZDEMIR Enerji and AG Anadolu go up and down completely randomly.

Pair Corralation between IZDEMIR Enerji and AG Anadolu

Assuming the 90 days trading horizon IZDEMIR Enerji Elektrik is expected to generate 0.44 times more return on investment than AG Anadolu. However, IZDEMIR Enerji Elektrik is 2.28 times less risky than AG Anadolu. It trades about 0.08 of its potential returns per unit of risk. AG Anadolu Group is currently generating about -0.01 per unit of risk. If you would invest  477.00  in IZDEMIR Enerji Elektrik on October 4, 2024 and sell it today you would earn a total of  13.00  from holding IZDEMIR Enerji Elektrik or generate 2.73% return on investment over 90 days.

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

IZDEMIR Enerji Elektrik  vs.  AG Anadolu Group

IZDEMIR Enerji Elektrik

Risk-Adjusted Performance

9 of 100

OK

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

AG Anadolu Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AG Anadolu Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, AG Anadolu may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with IZDEMIR Enerji and AG Anadolu

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

The idea behind IZDEMIR Enerji Elektrik and AG Anadolu Group 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..