Correlation Between Otokar Otomotiv and EIS Eczacibasi

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

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

Diversification Opportunities for Otokar Otomotiv and EIS Eczacibasi

0.51

Correlation Coefficient

Otokar Otomotiv  EIS Eczacibasi

Very weak diversification

The 3 months correlation between Otokar and EIS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Otokar Otomotiv ve 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 Otokar Otomotiv 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 Otokar Otomotiv ve 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 Otokar Otomotiv i.e., Otokar Otomotiv and EIS Eczacibasi go up and down completely randomly.

Pair Corralation between Otokar Otomotiv and EIS Eczacibasi

Assuming the 90 days trading horizon Otokar Otomotiv ve is expected to generate 1.04 times more return on investment than EIS Eczacibasi. However, Otokar Otomotiv is 1.04 times more volatile than EIS Eczacibasi Ilac. It trades about 0.0 of its potential returns per unit of risk. EIS Eczacibasi Ilac is currently generating about -0.06 per unit of risk. If you would invest  49,625  in Otokar Otomotiv ve on December 27, 2024 and sell it today you would lose (825.00) from holding Otokar Otomotiv ve or give up 1.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Otokar Otomotiv ve  vs.  EIS Eczacibasi Ilac

Otokar Otomotiv ve

Risk-Adjusted Performance

Very Weak

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

EIS Eczacibasi Ilac

Risk-Adjusted Performance

Very Weak

Over the last 90 days EIS Eczacibasi Ilac 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 Otokar Otomotiv and EIS Eczacibasi

The main advantage of trading using opposite Otokar Otomotiv and EIS Eczacibasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otokar Otomotiv 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 Otokar Otomotiv ve 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.

Check out your portfolio center.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.