Correlation Between IZDEMIR Enerji and Gedik Yatirim

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

Diversification Opportunities for IZDEMIR Enerji and Gedik Yatirim

0.49

Correlation Coefficient

IZDEMIR Enerji  Gedik Yatirim

Very weak diversification

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

Pair Corralation between IZDEMIR Enerji and Gedik Yatirim

Assuming the 90 days trading horizon IZDEMIR Enerji is expected to generate 1.94 times less return on investment than Gedik Yatirim. In addition to that, IZDEMIR Enerji is 1.29 times more volatile than Gedik Yatirim Menkul. It trades about 0.08 of its total potential returns per unit of risk. Gedik Yatirim Menkul is currently generating about 0.19 per unit of volatility. If you would invest  619.00  in Gedik Yatirim Menkul on September 12, 2024 and sell it today you would earn a total of  185.00  from holding Gedik Yatirim Menkul or generate 29.89% return on investment over 90 days.

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

IZDEMIR Enerji Elektrik  vs.  Gedik Yatirim Menkul

IZDEMIR Enerji Elektrik

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in IZDEMIR Enerji Elektrik are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, IZDEMIR Enerji demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Gedik Yatirim Menkul

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gedik Yatirim Menkul are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gedik Yatirim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IZDEMIR Enerji and Gedik Yatirim

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

The idea behind IZDEMIR Enerji Elektrik and Gedik Yatirim Menkul 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.