Correlation Between Zorlu Enerji and Prizma Pres

Can any of the company-specific risk be diversified away by investing in both Zorlu Enerji and Prizma Pres 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 Prizma Pres 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 Prizma Pres Matbaacilik, you can compare the effects of market volatilities on Zorlu Enerji and Prizma Pres 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 Prizma Pres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zorlu Enerji and Prizma Pres.

Diversification Opportunities for Zorlu Enerji and Prizma Pres

-0.65

Correlation Coefficient

Zorlu Enerji  Prizma Pres

Excellent diversification

The 3 months correlation between Zorlu and Prizma is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Zorlu Enerji Elektrik and Prizma Pres Matbaacilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prizma Pres Matbaacilik 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 Prizma Pres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prizma Pres Matbaacilik has no effect on the direction of Zorlu Enerji i.e., Zorlu Enerji and Prizma Pres go up and down completely randomly.

Pair Corralation between Zorlu Enerji and Prizma Pres

Assuming the 90 days trading horizon Zorlu Enerji Elektrik is expected to generate 0.5 times more return on investment than Prizma Pres. However, Zorlu Enerji Elektrik is 1.98 times less risky than Prizma Pres. It trades about 0.03 of its potential returns per unit of risk. Prizma Pres Matbaacilik is currently generating about -0.39 per unit of risk. If you would invest  440.00  in Zorlu Enerji Elektrik on October 4, 2024 and sell it today you would earn a total of  3.00  from holding Zorlu Enerji Elektrik or generate 0.68% return on investment over 90 days.

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

Zorlu Enerji Elektrik  vs.  Prizma Pres Matbaacilik

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.

Prizma Pres Matbaacilik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prizma Pres Matbaacilik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Zorlu Enerji and Prizma Pres

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

The idea behind Zorlu Enerji Elektrik and Prizma Pres Matbaacilik 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.