Correlation Between Mercan Kimya and Girisim Elektrik

Can any of the company-specific risk be diversified away by investing in both Mercan Kimya and Girisim Elektrik 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 Mercan Kimya and Girisim Elektrik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mercan Kimya Sanayi and Girisim Elektrik Taahhut, you can compare the effects of market volatilities on Mercan Kimya and Girisim Elektrik 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 Mercan Kimya with a short position of Girisim Elektrik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercan Kimya and Girisim Elektrik.

Diversification Opportunities for Mercan Kimya and Girisim Elektrik

-0.35

Correlation Coefficient

Mercan Kimya  Girisim Elektrik

Very good diversification

The 3 months correlation between Mercan and Girisim is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mercan Kimya Sanayi and Girisim Elektrik Taahhut in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Girisim Elektrik Taahhut and Mercan Kimya 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 Mercan Kimya Sanayi are associated (or correlated) with Girisim Elektrik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Girisim Elektrik Taahhut has no effect on the direction of Mercan Kimya i.e., Mercan Kimya and Girisim Elektrik go up and down completely randomly.

Pair Corralation between Mercan Kimya and Girisim Elektrik

Assuming the 90 days trading horizon Mercan Kimya is expected to generate 23.34 times less return on investment than Girisim Elektrik. But when comparing it to its historical volatility, Mercan Kimya Sanayi is 1.36 times less risky than Girisim Elektrik. It trades about 0.01 of its potential returns per unit of risk. Girisim Elektrik Taahhut is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4,004  in Girisim Elektrik Taahhut on October 5, 2024 and sell it today you would earn a total of  702.00  from holding Girisim Elektrik Taahhut or generate 17.53% return on investment over 90 days.

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

Mercan Kimya Sanayi  vs.  Girisim Elektrik Taahhut

Mercan Kimya Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Girisim Elektrik Taahhut

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Mercan Kimya and Girisim Elektrik

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

The idea behind Mercan Kimya Sanayi and Girisim Elektrik Taahhut 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.