Correlation Between Zedur Enerji and Ihlas Holding

Can any of the company-specific risk be diversified away by investing in both Zedur Enerji and Ihlas Holding 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 Zedur Enerji and Ihlas Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zedur Enerji Elektrik and Ihlas Holding AS, you can compare the effects of market volatilities on Zedur Enerji and Ihlas Holding 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 Zedur Enerji with a short position of Ihlas Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zedur Enerji and Ihlas Holding.

Diversification Opportunities for Zedur Enerji and Ihlas Holding

0.75

Correlation Coefficient

Zedur Enerji  Ihlas Holding

Poor diversification

The 3 months correlation between Zedur and Ihlas is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Zedur Enerji Elektrik and Ihlas Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihlas Holding AS and Zedur Enerji 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 Zedur Enerji Elektrik are associated (or correlated) with Ihlas Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihlas Holding AS has no effect on the direction of Zedur Enerji i.e., Zedur Enerji and Ihlas Holding go up and down completely randomly.

Pair Corralation between Zedur Enerji and Ihlas Holding

Assuming the 90 days trading horizon Zedur Enerji Elektrik is expected to generate 0.66 times more return on investment than Ihlas Holding. However, Zedur Enerji Elektrik is 1.52 times less risky than Ihlas Holding. It trades about 0.16 of its potential returns per unit of risk. Ihlas Holding AS is currently generating about 0.08 per unit of risk. If you would invest  834.00  in Zedur Enerji Elektrik on October 11, 2024 and sell it today you would earn a total of  87.00  from holding Zedur Enerji Elektrik or generate 10.43% return on investment over 90 days.

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

Zedur Enerji Elektrik  vs.  Ihlas Holding AS

Zedur Enerji Elektrik

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zedur Enerji Elektrik are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Zedur Enerji demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ihlas Holding AS

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Ihlas Holding AS are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Ihlas Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zedur Enerji and Ihlas Holding

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

The idea behind Zedur Enerji Elektrik and Ihlas Holding AS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.