Correlation Between Zorlu Enerji and Ufuk Yatirim

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

Diversification Opportunities for Zorlu Enerji and Ufuk Yatirim

0.79

Correlation Coefficient

Zorlu Enerji  Ufuk Yatirim

Poor diversification

The 3 months correlation between Zorlu and Ufuk is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Zorlu Enerji Elektrik and Ufuk Yatirim Yonetim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ufuk Yatirim Yonetim 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 Ufuk Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ufuk Yatirim Yonetim has no effect on the direction of Zorlu Enerji i.e., Zorlu Enerji and Ufuk Yatirim go up and down completely randomly.

Pair Corralation between Zorlu Enerji and Ufuk Yatirim

Assuming the 90 days trading horizon Zorlu Enerji is expected to generate 11.56 times less return on investment than Ufuk Yatirim. But when comparing it to its historical volatility, Zorlu Enerji Elektrik is 3.05 times less risky than Ufuk Yatirim. It trades about 0.1 of its potential returns per unit of risk. Ufuk Yatirim Yonetim is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  47,200  in Ufuk Yatirim Yonetim on September 23, 2024 and sell it today you would earn a total of  16,300  from holding Ufuk Yatirim Yonetim or generate 34.53% return on investment over 90 days.

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

Zorlu Enerji Elektrik  vs.  Ufuk Yatirim Yonetim

Zorlu Enerji Elektrik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zorlu Enerji Elektrik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Zorlu Enerji is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Ufuk Yatirim Yonetim

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ufuk Yatirim Yonetim are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Ufuk Yatirim unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zorlu Enerji and Ufuk Yatirim

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

The idea behind Zorlu Enerji Elektrik and Ufuk Yatirim Yonetim 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.