Correlation Between Eregli Demir and Arena Bilgisayar

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

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

Diversification Opportunities for Eregli Demir and Arena Bilgisayar

0.0

Correlation Coefficient

Eregli Demir  Arena Bilgisayar

Pay attention - limited upside

The 3 months correlation between Eregli and Arena is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Arena Bilgisayar Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Bilgisayar Sanayi and Eregli Demir 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 Eregli Demir ve are associated (or correlated) with Arena Bilgisayar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Bilgisayar Sanayi has no effect on the direction of Eregli Demir i.e., Eregli Demir and Arena Bilgisayar go up and down completely randomly.

Pair Corralation between Eregli Demir and Arena Bilgisayar

If you would invest  3,130  in Eregli Demir ve on February 3, 2024 and sell it today you would earn a total of  1,332  from holding Eregli Demir ve or generate 42.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eregli Demir ve  vs.  Arena Bilgisayar Sanayi

Eregli Demir ve

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eregli Demir ve are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong essential indicators, Eregli Demir is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Arena Bilgisayar Sanayi

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with Eregli Demir and Arena Bilgisayar

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

The idea behind Eregli Demir ve and Arena Bilgisayar Sanayi 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.