Correlation Between Celebi Hava and Eregli Demir

Can any of the company-specific risk be diversified away by investing in both Celebi Hava and Eregli Demir 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 Celebi Hava and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Celebi Hava Servisi and Eregli Demir ve, you can compare the effects of market volatilities on Celebi Hava and Eregli Demir 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 Celebi Hava with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celebi Hava and Eregli Demir.

Diversification Opportunities for Celebi Hava and Eregli Demir

0.49

Correlation Coefficient

Celebi Hava  Eregli Demir

Very weak diversification

The 3 months correlation between Celebi and Eregli is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Celebi Hava Servisi and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and Celebi Hava 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 Celebi Hava Servisi are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Celebi Hava i.e., Celebi Hava and Eregli Demir go up and down completely randomly.

Pair Corralation between Celebi Hava and Eregli Demir

Assuming the 90 days trading horizon Celebi Hava is expected to generate 1.71 times less return on investment than Eregli Demir. In addition to that, Celebi Hava is 2.15 times more volatile than Eregli Demir ve. It trades about 0.07 of its total potential returns per unit of risk. Eregli Demir ve is currently generating about 0.25 per unit of volatility. If you would invest  4,082  in Eregli Demir ve on March 11, 2024 and sell it today you would earn a total of  712.00  from holding Eregli Demir ve or generate 17.44% return on investment over 90 days.

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

Celebi Hava Servisi  vs.  Eregli Demir ve

Celebi Hava Servisi

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Celebi Hava Servisi are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Celebi Hava demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Eregli Demir ve

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eregli Demir ve are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain essential indicators, Eregli Demir may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Celebi Hava and Eregli Demir

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

The idea behind Celebi Hava Servisi and Eregli Demir 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.