Correlation Between Sodas Sodyum and Eminis Ambalaj

Can any of the company-specific risk be diversified away by investing in both Sodas Sodyum and Eminis Ambalaj 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 Sodas Sodyum and Eminis Ambalaj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sodas Sodyum Sanayi and Eminis Ambalaj Sanayi, you can compare the effects of market volatilities on Sodas Sodyum and Eminis Ambalaj 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 Sodas Sodyum with a short position of Eminis Ambalaj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sodas Sodyum and Eminis Ambalaj.

Diversification Opportunities for Sodas Sodyum and Eminis Ambalaj

0.07

Correlation Coefficient

Sodas Sodyum  Eminis Ambalaj

Significant diversification

The 3 months correlation between Sodas and Eminis is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sodas Sodyum Sanayi and Eminis Ambalaj Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eminis Ambalaj Sanayi and Sodas Sodyum 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 Sodas Sodyum Sanayi are associated (or correlated) with Eminis Ambalaj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eminis Ambalaj Sanayi has no effect on the direction of Sodas Sodyum i.e., Sodas Sodyum and Eminis Ambalaj go up and down completely randomly.

Pair Corralation between Sodas Sodyum and Eminis Ambalaj

Assuming the 90 days trading horizon Sodas Sodyum Sanayi is expected to generate 0.59 times more return on investment than Eminis Ambalaj. However, Sodas Sodyum Sanayi is 1.7 times less risky than Eminis Ambalaj. It trades about -0.03 of its potential returns per unit of risk. Eminis Ambalaj Sanayi is currently generating about -0.03 per unit of risk. If you would invest  11,260  in Sodas Sodyum Sanayi on October 6, 2024 and sell it today you would lose (760.00) from holding Sodas Sodyum Sanayi or give up 6.75% of portfolio value over 90 days.

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

Sodas Sodyum Sanayi  vs.  Eminis Ambalaj Sanayi

Sodas Sodyum Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Eminis Ambalaj Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eminis Ambalaj Sanayi 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 Sodas Sodyum and Eminis Ambalaj

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

The idea behind Sodas Sodyum Sanayi and Eminis Ambalaj Sanayi 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.