Correlation Between IZDEMIR Enerji and Beyaz Filo

Can any of the company-specific risk be diversified away by investing in both IZDEMIR Enerji and Beyaz Filo 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 Beyaz Filo 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 Beyaz Filo Oto, you can compare the effects of market volatilities on IZDEMIR Enerji and Beyaz Filo 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 Beyaz Filo. Check out your portfolio center. Please also check ongoing floating volatility patterns of IZDEMIR Enerji and Beyaz Filo.

Diversification Opportunities for IZDEMIR Enerji and Beyaz Filo

0.49

Correlation Coefficient

IZDEMIR Enerji  Beyaz Filo

Very weak diversification

The 3 months correlation between IZDEMIR and Beyaz is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding IZDEMIR Enerji Elektrik and Beyaz Filo Oto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyaz Filo Oto 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 Beyaz Filo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyaz Filo Oto has no effect on the direction of IZDEMIR Enerji i.e., IZDEMIR Enerji and Beyaz Filo go up and down completely randomly.

Pair Corralation between IZDEMIR Enerji and Beyaz Filo

Assuming the 90 days trading horizon IZDEMIR Enerji is expected to generate 2.28 times less return on investment than Beyaz Filo. But when comparing it to its historical volatility, IZDEMIR Enerji Elektrik is 1.66 times less risky than Beyaz Filo. It trades about 0.1 of its potential returns per unit of risk. Beyaz Filo Oto is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,706  in Beyaz Filo Oto on September 22, 2024 and sell it today you would earn a total of  204.00  from holding Beyaz Filo Oto or generate 7.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

IZDEMIR Enerji Elektrik  vs.  Beyaz Filo Oto

IZDEMIR Enerji Elektrik

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IZDEMIR Enerji Elektrik are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, IZDEMIR Enerji may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Beyaz Filo Oto

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Beyaz Filo Oto are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Beyaz Filo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with IZDEMIR Enerji and Beyaz Filo

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

The idea behind IZDEMIR Enerji Elektrik and Beyaz Filo Oto 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.