Correlation Between Gentas Genel and Eminis Ambalaj

Can any of the company-specific risk be diversified away by investing in both Gentas Genel and Eminis Ambalaj 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 Gentas Genel and Eminis Ambalaj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gentas Genel Metal and Eminis Ambalaj Sanayi, you can compare the effects of market volatilities on Gentas Genel and Eminis Ambalaj 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 Gentas Genel with a short position of Eminis Ambalaj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentas Genel and Eminis Ambalaj.

Diversification Opportunities for Gentas Genel and Eminis Ambalaj

-0.42

Correlation Coefficient

Gentas Genel  Eminis Ambalaj

Very good diversification

The 3 months correlation between Gentas and Eminis is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Gentas Genel Metal and Eminis Ambalaj Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eminis Ambalaj Sanayi and Gentas Genel 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 Gentas Genel Metal are associated (or correlated) with Eminis Ambalaj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eminis Ambalaj Sanayi has no effect on the direction of Gentas Genel i.e., Gentas Genel and Eminis Ambalaj go up and down completely randomly.

Pair Corralation between Gentas Genel and Eminis Ambalaj

Assuming the 90 days trading horizon Gentas Genel is expected to generate 2.65 times less return on investment than Eminis Ambalaj. But when comparing it to its historical volatility, Gentas Genel Metal is 1.59 times less risky than Eminis Ambalaj. It trades about 0.05 of its potential returns per unit of risk. Eminis Ambalaj Sanayi is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,275  in Eminis Ambalaj Sanayi on September 10, 2024 and sell it today you would earn a total of  19,025  from holding Eminis Ambalaj Sanayi or generate 360.66% return on investment over 90 days.

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

Gentas Genel Metal  vs.  Eminis Ambalaj Sanayi

Gentas Genel Metal

Risk-Adjusted Performance

10 of 100

OK

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

Eminis Ambalaj Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eminis Ambalaj Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Gentas Genel and Eminis Ambalaj

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

The idea behind Gentas Genel Metal and Eminis Ambalaj 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.