Correlation Between Seyitler Kimya and DO AG

Can any of the company-specific risk be diversified away by investing in both Seyitler Kimya and DO AG 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 Seyitler Kimya and DO AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seyitler Kimya Sanayi and DO AG, you can compare the effects of market volatilities on Seyitler Kimya and DO AG 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 Seyitler Kimya with a short position of DO AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seyitler Kimya and DO AG.

Diversification Opportunities for Seyitler Kimya and DO AG

0.23

Correlation Coefficient

Seyitler Kimya  DO AG

Modest diversification

The 3 months correlation between Seyitler and DOCO is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Seyitler Kimya Sanayi and DO AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO AG and Seyitler Kimya 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 Seyitler Kimya Sanayi are associated (or correlated) with DO AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO AG has no effect on the direction of Seyitler Kimya i.e., Seyitler Kimya and DO AG go up and down completely randomly.

Pair Corralation between Seyitler Kimya and DO AG

Assuming the 90 days trading horizon Seyitler Kimya Sanayi is expected to generate 4.15 times more return on investment than DO AG. However, Seyitler Kimya is 4.15 times more volatile than DO AG. It trades about 0.3 of its potential returns per unit of risk. DO AG is currently generating about 0.17 per unit of risk. If you would invest  684.00  in Seyitler Kimya Sanayi on February 12, 2024 and sell it today you would earn a total of  236.00  from holding Seyitler Kimya Sanayi or generate 34.5% return on investment over 90 days.

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

Seyitler Kimya Sanayi  vs.  DO AG

Seyitler Kimya Sanayi

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seyitler Kimya Sanayi are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, Seyitler Kimya demonstrated solid returns over the last few months and may actually be approaching a breakup point.

DO AG

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DO AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, DO AG unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seyitler Kimya and DO AG

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

The idea behind Seyitler Kimya Sanayi and DO AG 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.