Correlation Between IZDEMIR Enerji and Yapi Ve

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

Diversification Opportunities for IZDEMIR Enerji and Yapi Ve

0.28

Correlation Coefficient

IZDEMIR Enerji  Yapi Ve

Modest diversification

The 3 months correlation between IZDEMIR and Yapi is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding IZDEMIR Enerji Elektrik and Yapi ve Kredi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yapi ve Kredi 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 Yapi Ve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yapi ve Kredi has no effect on the direction of IZDEMIR Enerji i.e., IZDEMIR Enerji and Yapi Ve go up and down completely randomly.

Pair Corralation between IZDEMIR Enerji and Yapi Ve

Assuming the 90 days trading horizon IZDEMIR Enerji is expected to generate 4.56 times less return on investment than Yapi Ve. In addition to that, IZDEMIR Enerji is 1.26 times more volatile than Yapi ve Kredi. It trades about 0.02 of its total potential returns per unit of risk. Yapi ve Kredi is currently generating about 0.11 per unit of volatility. If you would invest  809.00  in Yapi ve Kredi on October 4, 2024 and sell it today you would earn a total of  2,371  from holding Yapi ve Kredi or generate 293.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	70.3%
Values	Daily Returns

IZDEMIR Enerji Elektrik  vs.  Yapi ve Kredi

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.

Yapi ve Kredi

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yapi ve Kredi are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Yapi Ve demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IZDEMIR Enerji and Yapi Ve

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

The idea behind IZDEMIR Enerji Elektrik and Yapi ve Kredi 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.