Correlation Between RONESANS GAYRIMENKUL and Alfas Solar

Can any of the company-specific risk be diversified away by investing in both RONESANS GAYRIMENKUL and Alfas Solar 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 RONESANS GAYRIMENKUL and Alfas Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RONESANS GAYRIMENKUL YAT and Alfas Solar Enerji, you can compare the effects of market volatilities on RONESANS GAYRIMENKUL and Alfas Solar 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 RONESANS GAYRIMENKUL with a short position of Alfas Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of RONESANS GAYRIMENKUL and Alfas Solar.

Diversification Opportunities for RONESANS GAYRIMENKUL and Alfas Solar

0.59

Correlation Coefficient

RONESANS GAYRIMENKUL  Alfas Solar

Very weak diversification

The 3 months correlation between RONESANS and Alfas is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding RONESANS GAYRIMENKUL YAT and Alfas Solar Enerji in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfas Solar Enerji and RONESANS GAYRIMENKUL 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 RONESANS GAYRIMENKUL YAT are associated (or correlated) with Alfas Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfas Solar Enerji has no effect on the direction of RONESANS GAYRIMENKUL i.e., RONESANS GAYRIMENKUL and Alfas Solar go up and down completely randomly.

Pair Corralation between RONESANS GAYRIMENKUL and Alfas Solar

Assuming the 90 days trading horizon RONESANS GAYRIMENKUL YAT is expected to generate 0.54 times more return on investment than Alfas Solar. However, RONESANS GAYRIMENKUL YAT is 1.84 times less risky than Alfas Solar. It trades about -0.16 of its potential returns per unit of risk. Alfas Solar Enerji is currently generating about -0.1 per unit of risk. If you would invest  12,660  in RONESANS GAYRIMENKUL YAT on December 25, 2024 and sell it today you would lose (2,660) from holding RONESANS GAYRIMENKUL YAT or give up 21.01% of portfolio value over 90 days.

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

RONESANS GAYRIMENKUL YAT  vs.  Alfas Solar Enerji

RONESANS GAYRIMENKUL YAT

Risk-Adjusted Performance

Very Weak

Over the last 90 days RONESANS GAYRIMENKUL YAT 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.

Alfas Solar Enerji

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alfas Solar Enerji 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.

Pair Trading with RONESANS GAYRIMENKUL and Alfas Solar

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

The idea behind RONESANS GAYRIMENKUL YAT and Alfas Solar Enerji 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.