Correlation Between IZDEMIR Enerji and Global Yatirim

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

Diversification Opportunities for IZDEMIR Enerji and Global Yatirim

0.52

Correlation Coefficient

IZDEMIR Enerji  Global Yatirim

Very weak diversification

The 3 months correlation between IZDEMIR and Global is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding IZDEMIR Enerji Elektrik and Global Yatirim Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Yatirim Holding 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 Global Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Yatirim Holding has no effect on the direction of IZDEMIR Enerji i.e., IZDEMIR Enerji and Global Yatirim go up and down completely randomly.

Pair Corralation between IZDEMIR Enerji and Global Yatirim

Assuming the 90 days trading horizon IZDEMIR Enerji is expected to generate 23.34 times less return on investment than Global Yatirim. But when comparing it to its historical volatility, IZDEMIR Enerji Elektrik is 1.14 times less risky than Global Yatirim. It trades about 0.01 of its potential returns per unit of risk. Global Yatirim Holding is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  560.00  in Global Yatirim Holding on December 25, 2024 and sell it today you would earn a total of  217.00  from holding Global Yatirim Holding or generate 38.75% 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.  Global Yatirim Holding

IZDEMIR Enerji Elektrik

Risk-Adjusted Performance

Very Weak

Over the last 90 days IZDEMIR Enerji Elektrik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, IZDEMIR Enerji is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Global Yatirim Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Yatirim Holding are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Global Yatirim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IZDEMIR Enerji and Global Yatirim

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

The idea behind IZDEMIR Enerji Elektrik and Global Yatirim Holding 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.