Correlation Between MEGA METAL and Eczacibasi Yatirim

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

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

Diversification Opportunities for MEGA METAL and Eczacibasi Yatirim

0.57

Correlation Coefficient

MEGA METAL  Eczacibasi Yatirim

Very weak diversification

The 3 months correlation between MEGA and Eczacibasi is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and Eczacibasi Yatirim Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eczacibasi Yatirim and MEGA METAL 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 MEGA METAL are associated (or correlated) with Eczacibasi Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eczacibasi Yatirim has no effect on the direction of MEGA METAL i.e., MEGA METAL and Eczacibasi Yatirim go up and down completely randomly.

Pair Corralation between MEGA METAL and Eczacibasi Yatirim

Assuming the 90 days trading horizon MEGA METAL is expected to under-perform the Eczacibasi Yatirim. In addition to that, MEGA METAL is 1.02 times more volatile than Eczacibasi Yatirim Holding. It trades about -0.09 of its total potential returns per unit of risk. Eczacibasi Yatirim Holding is currently generating about -0.05 per unit of volatility. If you would invest  19,700  in Eczacibasi Yatirim Holding on December 29, 2024 and sell it today you would lose (1,650) from holding Eczacibasi Yatirim Holding or give up 8.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

MEGA METAL  vs.  Eczacibasi Yatirim Holding

MEGA METAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days MEGA METAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Eczacibasi Yatirim

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eczacibasi Yatirim Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with MEGA METAL and Eczacibasi Yatirim

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

The idea behind MEGA METAL and Eczacibasi Yatirim Holding 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.