Correlation Between Smart Gunes and Bms Birlesik

Can any of the company-specific risk be diversified away by investing in both Smart Gunes and Bms Birlesik 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 Smart Gunes and Bms Birlesik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Smart Gunes Enerjisi and Bms Birlesik Metal, you can compare the effects of market volatilities on Smart Gunes and Bms Birlesik 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 Smart Gunes with a short position of Bms Birlesik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Gunes and Bms Birlesik.

Diversification Opportunities for Smart Gunes and Bms Birlesik

-0.68

Correlation Coefficient

Smart Gunes  Bms Birlesik

Excellent diversification

The 3 months correlation between Smart and Bms is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Smart Gunes Enerjisi and Bms Birlesik Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bms Birlesik Metal and Smart Gunes 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 Smart Gunes Enerjisi are associated (or correlated) with Bms Birlesik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bms Birlesik Metal has no effect on the direction of Smart Gunes i.e., Smart Gunes and Bms Birlesik go up and down completely randomly.

Pair Corralation between Smart Gunes and Bms Birlesik

Assuming the 90 days trading horizon Smart Gunes Enerjisi is expected to under-perform the Bms Birlesik. In addition to that, Smart Gunes is 1.07 times more volatile than Bms Birlesik Metal. It trades about -0.09 of its total potential returns per unit of risk. Bms Birlesik Metal is currently generating about 0.21 per unit of volatility. If you would invest  2,770  in Bms Birlesik Metal on December 22, 2024 and sell it today you would earn a total of  1,410  from holding Bms Birlesik Metal or generate 50.9% return on investment over 90 days.

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

Smart Gunes Enerjisi  vs.  Bms Birlesik Metal

Smart Gunes Enerjisi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smart Gunes Enerjisi 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.

Bms Birlesik Metal

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bms Birlesik Metal are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bms Birlesik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smart Gunes and Bms Birlesik

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

The idea behind Smart Gunes Enerjisi and Bms Birlesik Metal 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 Transaction History module to view history of all your transactions and understand their impact on performance.