Correlation Between Vestel Beyaz and Hektas Ticaret

Can any of the company-specific risk be diversified away by investing in both Vestel Beyaz and Hektas Ticaret 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 Vestel Beyaz and Hektas Ticaret into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vestel Beyaz Esya and Hektas Ticaret TAS, you can compare the effects of market volatilities on Vestel Beyaz and Hektas Ticaret 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 Vestel Beyaz with a short position of Hektas Ticaret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestel Beyaz and Hektas Ticaret.

Diversification Opportunities for Vestel Beyaz and Hektas Ticaret

0.16

Correlation Coefficient

Vestel Beyaz  Hektas Ticaret

Average diversification

The 3 months correlation between Vestel and Hektas is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vestel Beyaz Esya and Hektas Ticaret TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hektas Ticaret TAS and Vestel Beyaz 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 Vestel Beyaz Esya are associated (or correlated) with Hektas Ticaret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hektas Ticaret TAS has no effect on the direction of Vestel Beyaz i.e., Vestel Beyaz and Hektas Ticaret go up and down completely randomly.

Pair Corralation between Vestel Beyaz and Hektas Ticaret

Assuming the 90 days trading horizon Vestel Beyaz Esya is expected to under-perform the Hektas Ticaret. But the stock apears to be less risky and, when comparing its historical volatility, Vestel Beyaz Esya is 2.56 times less risky than Hektas Ticaret. The stock trades about -0.31 of its potential returns per unit of risk. The Hektas Ticaret TAS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  372.00  in Hektas Ticaret TAS on October 22, 2024 and sell it today you would earn a total of  11.00  from holding Hektas Ticaret TAS or generate 2.96% return on investment over 90 days.

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

Vestel Beyaz Esya  vs.  Hektas Ticaret TAS

Vestel Beyaz Esya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vestel Beyaz Esya 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.

Hektas Ticaret TAS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hektas Ticaret TAS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Hektas Ticaret may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Vestel Beyaz and Hektas Ticaret

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

The idea behind Vestel Beyaz Esya and Hektas Ticaret TAS 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.