Correlation Between Sinpas Gayrimenkul and Eregli Demir

Can any of the company-specific risk be diversified away by investing in both Sinpas Gayrimenkul and Eregli Demir 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 Sinpas Gayrimenkul and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sinpas Gayrimenkul Yatirim and Eregli Demir ve, you can compare the effects of market volatilities on Sinpas Gayrimenkul and Eregli Demir 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 Sinpas Gayrimenkul with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinpas Gayrimenkul and Eregli Demir.

Diversification Opportunities for Sinpas Gayrimenkul and Eregli Demir

0.6

Correlation Coefficient

Sinpas Gayrimenkul  Eregli Demir

Poor diversification

The 3 months correlation between Sinpas and Eregli is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sinpas Gayrimenkul Yatirim and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and Sinpas 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 Sinpas Gayrimenkul Yatirim are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Sinpas Gayrimenkul i.e., Sinpas Gayrimenkul and Eregli Demir go up and down completely randomly.

Pair Corralation between Sinpas Gayrimenkul and Eregli Demir

Assuming the 90 days trading horizon Sinpas Gayrimenkul Yatirim is expected to generate 1.96 times more return on investment than Eregli Demir. However, Sinpas Gayrimenkul is 1.96 times more volatile than Eregli Demir ve. It trades about -0.18 of its potential returns per unit of risk. Eregli Demir ve is currently generating about -0.39 per unit of risk. If you would invest  337.00  in Sinpas Gayrimenkul Yatirim on October 8, 2024 and sell it today you would lose (27.00) from holding Sinpas Gayrimenkul Yatirim or give up 8.01% of portfolio value over 90 days.

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

Sinpas Gayrimenkul Yatirim  vs.  Eregli Demir ve

Sinpas Gayrimenkul

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sinpas Gayrimenkul Yatirim are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Sinpas Gayrimenkul demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Eregli Demir ve

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eregli Demir ve are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Eregli Demir is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Sinpas Gayrimenkul and Eregli Demir

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

The idea behind Sinpas Gayrimenkul Yatirim and Eregli Demir 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.