Correlation Between Zorlu Enerji and Bosch Fren

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

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

Diversification Opportunities for Zorlu Enerji and Bosch Fren

-0.1

Correlation Coefficient

Zorlu Enerji  Bosch Fren

Good diversification

The 3 months correlation between Zorlu and Bosch is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Zorlu Enerji Elektrik and Bosch Fren Sistemleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosch Fren Sistemleri and Zorlu 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 Zorlu Enerji Elektrik are associated (or correlated) with Bosch Fren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosch Fren Sistemleri has no effect on the direction of Zorlu Enerji i.e., Zorlu Enerji and Bosch Fren go up and down completely randomly.

Pair Corralation between Zorlu Enerji and Bosch Fren

Assuming the 90 days trading horizon Zorlu Enerji is expected to generate 15.56 times less return on investment than Bosch Fren. But when comparing it to its historical volatility, Zorlu Enerji Elektrik is 10.63 times less risky than Bosch Fren. It trades about 0.03 of its potential returns per unit of risk. Bosch Fren Sistemleri is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  39,632  in Bosch Fren Sistemleri on October 4, 2024 and sell it today you would earn a total of  28,268  from holding Bosch Fren Sistemleri or generate 71.33% return on investment over 90 days.

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

Zorlu Enerji Elektrik  vs.  Bosch Fren Sistemleri

Zorlu Enerji Elektrik

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zorlu Enerji Elektrik are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Zorlu Enerji may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bosch Fren Sistemleri

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bosch Fren Sistemleri are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Bosch Fren is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Zorlu Enerji and Bosch Fren

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

The idea behind Zorlu Enerji Elektrik and Bosch Fren Sistemleri 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 Commodity Directory module to find actively traded commodities issued by global exchanges.