Correlation Between Kordsa Global and EIS Eczacibasi

Can any of the company-specific risk be diversified away by investing in both Kordsa Global and EIS Eczacibasi 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 Kordsa Global and EIS Eczacibasi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kordsa Global Endustriyel and EIS Eczacibasi Ilac, you can compare the effects of market volatilities on Kordsa Global and EIS Eczacibasi 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 Kordsa Global with a short position of EIS Eczacibasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kordsa Global and EIS Eczacibasi.

Diversification Opportunities for Kordsa Global and EIS Eczacibasi

0.36

Correlation Coefficient

Kordsa Global  EIS Eczacibasi

Weak diversification

The 3 months correlation between Kordsa and EIS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kordsa Global Endustriyel and EIS Eczacibasi Ilac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIS Eczacibasi Ilac and Kordsa Global 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 Kordsa Global Endustriyel are associated (or correlated) with EIS Eczacibasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIS Eczacibasi Ilac has no effect on the direction of Kordsa Global i.e., Kordsa Global and EIS Eczacibasi go up and down completely randomly.

Pair Corralation between Kordsa Global and EIS Eczacibasi

Assuming the 90 days trading horizon Kordsa Global Endustriyel is expected to generate 1.02 times more return on investment than EIS Eczacibasi. However, Kordsa Global is 1.02 times more volatile than EIS Eczacibasi Ilac. It trades about 0.09 of its potential returns per unit of risk. EIS Eczacibasi Ilac is currently generating about -0.12 per unit of risk. If you would invest  7,290  in Kordsa Global Endustriyel on October 12, 2024 and sell it today you would earn a total of  195.00  from holding Kordsa Global Endustriyel or generate 2.67% return on investment over 90 days.

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

Kordsa Global Endustriyel  vs.  EIS Eczacibasi Ilac

Kordsa Global Endustriyel

Risk-Adjusted Performance

4 of 100

Insignificant

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

EIS Eczacibasi Ilac

Risk-Adjusted Performance

15 of 100

Good

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

Pair Trading with Kordsa Global and EIS Eczacibasi

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

The idea behind Kordsa Global Endustriyel and EIS Eczacibasi Ilac 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.