Correlation Between Vestel Beyaz and Enerjisa Enerji

Can any of the company-specific risk be diversified away by investing in both Vestel Beyaz and Enerjisa Enerji 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 Vestel Beyaz and Enerjisa Enerji into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vestel Beyaz Esya and Enerjisa Enerji AS, you can compare the effects of market volatilities on Vestel Beyaz and Enerjisa Enerji 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 Vestel Beyaz with a short position of Enerjisa Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestel Beyaz and Enerjisa Enerji.

Diversification Opportunities for Vestel Beyaz and Enerjisa Enerji

0.84

Correlation Coefficient

Vestel Beyaz  Enerjisa Enerji

Very poor diversification

The 3 months correlation between Vestel and Enerjisa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Vestel Beyaz Esya and Enerjisa Enerji AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerjisa Enerji AS and Vestel Beyaz 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 Vestel Beyaz Esya are associated (or correlated) with Enerjisa Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerjisa Enerji AS has no effect on the direction of Vestel Beyaz i.e., Vestel Beyaz and Enerjisa Enerji go up and down completely randomly.

Pair Corralation between Vestel Beyaz and Enerjisa Enerji

Assuming the 90 days trading horizon Vestel Beyaz Esya is expected to generate 1.4 times more return on investment than Enerjisa Enerji. However, Vestel Beyaz is 1.4 times more volatile than Enerjisa Enerji AS. It trades about 0.12 of its potential returns per unit of risk. Enerjisa Enerji AS is currently generating about 0.13 per unit of risk. If you would invest  1,896  in Vestel Beyaz Esya on February 20, 2024 and sell it today you would earn a total of  388.00  from holding Vestel Beyaz Esya or generate 20.46% return on investment over 90 days.

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

Vestel Beyaz Esya  vs.  Enerjisa Enerji AS

Vestel Beyaz Esya

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vestel Beyaz Esya are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, Vestel Beyaz demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Enerjisa Enerji AS

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enerjisa Enerji AS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Enerjisa Enerji demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vestel Beyaz and Enerjisa Enerji

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

The idea behind Vestel Beyaz Esya and Enerjisa Enerji AS 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.