Correlation Between Makina Takim and Ege Endustri

Can any of the company-specific risk be diversified away by investing in both Makina Takim and Ege Endustri 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 Makina Takim and Ege Endustri into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Makina Takim Endustrisi and Ege Endustri ve, you can compare the effects of market volatilities on Makina Takim and Ege Endustri 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 Makina Takim with a short position of Ege Endustri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makina Takim and Ege Endustri.

Diversification Opportunities for Makina Takim and Ege Endustri

0.07

Correlation Coefficient

Makina Takim  Ege Endustri

Significant diversification

The 3 months correlation between Makina and Ege is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Makina Takim Endustrisi and Ege Endustri ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Endustri ve and Makina Takim 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 Makina Takim Endustrisi are associated (or correlated) with Ege Endustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Endustri ve has no effect on the direction of Makina Takim i.e., Makina Takim and Ege Endustri go up and down completely randomly.

Pair Corralation between Makina Takim and Ege Endustri

Assuming the 90 days trading horizon Makina Takim Endustrisi is expected to generate 1.98 times more return on investment than Ege Endustri. However, Makina Takim is 1.98 times more volatile than Ege Endustri ve. It trades about 0.11 of its potential returns per unit of risk. Ege Endustri ve is currently generating about -0.03 per unit of risk. If you would invest  632.00  in Makina Takim Endustrisi on September 21, 2024 and sell it today you would earn a total of  42.00  from holding Makina Takim Endustrisi or generate 6.65% return on investment over 90 days.

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

Makina Takim Endustrisi  vs.  Ege Endustri ve

Makina Takim Endustrisi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ege Endustri ve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Makina Takim and Ege Endustri

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

The idea behind Makina Takim Endustrisi and Ege Endustri ve 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.