Correlation Between Smart Gunes and Silverline Endustri

Can any of the company-specific risk be diversified away by investing in both Smart Gunes and Silverline Endustri 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 Silverline Endustri 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 Silverline Endustri ve, you can compare the effects of market volatilities on Smart Gunes and Silverline Endustri 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 Silverline Endustri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Gunes and Silverline Endustri.

Diversification Opportunities for Smart Gunes and Silverline Endustri

0.67

Correlation Coefficient

Smart Gunes  Silverline Endustri

Poor diversification

The 3 months correlation between Smart and Silverline is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Smart Gunes Enerjisi and Silverline Endustri ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silverline Endustri 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 Silverline Endustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silverline Endustri has no effect on the direction of Smart Gunes i.e., Smart Gunes and Silverline Endustri go up and down completely randomly.

Pair Corralation between Smart Gunes and Silverline Endustri

Assuming the 90 days trading horizon Smart Gunes Enerjisi is expected to generate 1.13 times more return on investment than Silverline Endustri. However, Smart Gunes is 1.13 times more volatile than Silverline Endustri ve. It trades about 0.11 of its potential returns per unit of risk. Silverline Endustri ve is currently generating about -0.14 per unit of risk. If you would invest  3,820  in Smart Gunes Enerjisi on September 22, 2024 and sell it today you would earn a total of  180.00  from holding Smart Gunes Enerjisi or generate 4.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Smart Gunes Enerjisi  vs.  Silverline Endustri ve

Smart Gunes Enerjisi

Risk-Adjusted Performance

0 of 100

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 fairly strong forward indicators, Smart Gunes is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Silverline Endustri

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Smart Gunes and Silverline Endustri

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

The idea behind Smart Gunes Enerjisi and Silverline Endustri ve 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.