Correlation Between IZDEMIR Enerji and Mackolik Internet

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

Diversification Opportunities for IZDEMIR Enerji and Mackolik Internet

0.56

Correlation Coefficient

IZDEMIR Enerji  Mackolik Internet

Very weak diversification

The 3 months correlation between IZDEMIR and Mackolik is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding IZDEMIR Enerji Elektrik and Mackolik Internet Hizmetleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackolik Internet 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 Mackolik Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackolik Internet has no effect on the direction of IZDEMIR Enerji i.e., IZDEMIR Enerji and Mackolik Internet go up and down completely randomly.

Pair Corralation between IZDEMIR Enerji and Mackolik Internet

Assuming the 90 days trading horizon IZDEMIR Enerji is expected to generate 6.72 times less return on investment than Mackolik Internet. In addition to that, IZDEMIR Enerji is 1.4 times more volatile than Mackolik Internet Hizmetleri. It trades about 0.02 of its total potential returns per unit of risk. Mackolik Internet Hizmetleri is currently generating about 0.21 per unit of volatility. If you would invest  7,944  in Mackolik Internet Hizmetleri on September 4, 2024 and sell it today you would earn a total of  2,506  from holding Mackolik Internet Hizmetleri or generate 31.55% 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.  Mackolik Internet Hizmetleri

IZDEMIR Enerji Elektrik

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IZDEMIR Enerji Elektrik are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, IZDEMIR Enerji is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Mackolik Internet

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mackolik Internet Hizmetleri are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Mackolik Internet demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IZDEMIR Enerji and Mackolik Internet

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

The idea behind IZDEMIR Enerji Elektrik and Mackolik Internet Hizmetleri 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..