Correlation Between Trabzon Liman and Bms Birlesik

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

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

Diversification Opportunities for Trabzon Liman and Bms Birlesik

-0.4

Correlation Coefficient

Trabzon Liman  Bms Birlesik

Very good diversification

The 3 months correlation between Trabzon and Bms is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Trabzon Liman Isletmeciligi 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 Trabzon Liman 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 Trabzon Liman Isletmeciligi 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 Trabzon Liman i.e., Trabzon Liman and Bms Birlesik go up and down completely randomly.

Pair Corralation between Trabzon Liman and Bms Birlesik

Assuming the 90 days trading horizon Trabzon Liman Isletmeciligi is expected to under-perform the Bms Birlesik. In addition to that, Trabzon Liman is 1.16 times more volatile than Bms Birlesik Metal. It trades about -0.02 of its total potential returns per unit of risk. Bms Birlesik Metal is currently generating about 0.33 per unit of volatility. If you would invest  2,770  in Bms Birlesik Metal on December 30, 2024 and sell it today you would earn a total of  1,632  from holding Bms Birlesik Metal or generate 58.92% return on investment over 90 days.

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

Trabzon Liman Isletmeciligi  vs.  Bms Birlesik Metal

Trabzon Liman Isletm

Risk-Adjusted Performance

Very Weak

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

Bms Birlesik Metal

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Bms Birlesik Metal are ranked lower than 25 (%) 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 Trabzon Liman and Bms Birlesik

The main advantage of trading using opposite Trabzon Liman and Bms Birlesik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trabzon Liman 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 Trabzon Liman Isletmeciligi 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.