Correlation Between BIST Electricity and Yatas Yatak

Can any of the company-specific risk be diversified away by investing in both BIST Electricity and Yatas Yatak 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 BIST Electricity and Yatas Yatak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BIST Electricity and Yatas Yatak ve, you can compare the effects of market volatilities on BIST Electricity and Yatas Yatak 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 BIST Electricity with a short position of Yatas Yatak. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIST Electricity and Yatas Yatak.

Diversification Opportunities for BIST Electricity and Yatas Yatak

0.71

Correlation Coefficient

BIST Electricity  Yatas Yatak

Poor diversification

The 3 months correlation between BIST and Yatas is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BIST Electricity and Yatas Yatak ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatas Yatak ve and BIST Electricity 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 BIST Electricity are associated (or correlated) with Yatas Yatak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatas Yatak ve has no effect on the direction of BIST Electricity i.e., BIST Electricity and Yatas Yatak go up and down completely randomly.

Pair Corralation between BIST Electricity and Yatas Yatak

Assuming the 90 days trading horizon BIST Electricity is expected to generate 1.13 times less return on investment than Yatas Yatak. But when comparing it to its historical volatility, BIST Electricity is 1.53 times less risky than Yatas Yatak. It trades about 0.03 of its potential returns per unit of risk. Yatas Yatak ve is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,614  in Yatas Yatak ve on September 14, 2024 and sell it today you would earn a total of  158.00  from holding Yatas Yatak ve or generate 6.04% return on investment over 90 days.

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

BIST Electricity  vs.  Yatas Yatak ve

Pair Trading with BIST Electricity and Yatas Yatak

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

The idea behind BIST Electricity and Yatas Yatak 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.