Correlation Between Kuyas Yatirim and Enerjisa Enerji

Can any of the company-specific risk be diversified away by investing in both Kuyas Yatirim and Enerjisa Enerji 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 Kuyas Yatirim and Enerjisa Enerji into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kuyas Yatirim AS and Enerjisa Enerji AS, you can compare the effects of market volatilities on Kuyas Yatirim and Enerjisa Enerji 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 Kuyas Yatirim with a short position of Enerjisa Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuyas Yatirim and Enerjisa Enerji.

Diversification Opportunities for Kuyas Yatirim and Enerjisa Enerji

0.33

Correlation Coefficient

Kuyas Yatirim  Enerjisa Enerji

Weak diversification

The 3 months correlation between Kuyas and Enerjisa is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kuyas Yatirim AS and Enerjisa Enerji AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerjisa Enerji AS and Kuyas Yatirim 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 Kuyas Yatirim AS are associated (or correlated) with Enerjisa Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerjisa Enerji AS has no effect on the direction of Kuyas Yatirim i.e., Kuyas Yatirim and Enerjisa Enerji go up and down completely randomly.

Pair Corralation between Kuyas Yatirim and Enerjisa Enerji

Assuming the 90 days trading horizon Kuyas Yatirim AS is expected to generate 1.25 times more return on investment than Enerjisa Enerji. However, Kuyas Yatirim is 1.25 times more volatile than Enerjisa Enerji AS. It trades about 0.35 of its potential returns per unit of risk. Enerjisa Enerji AS is currently generating about -0.02 per unit of risk. If you would invest  1,970  in Kuyas Yatirim AS on December 25, 2024 and sell it today you would earn a total of  1,840  from holding Kuyas Yatirim AS or generate 93.4% return on investment over 90 days.

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

Kuyas Yatirim AS  vs.  Enerjisa Enerji AS

Kuyas Yatirim AS

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kuyas Yatirim AS are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kuyas Yatirim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Enerjisa Enerji AS

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kuyas Yatirim and Enerjisa Enerji

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

The idea behind Kuyas Yatirim AS and Enerjisa Enerji AS 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.