Correlation Between Arcelik AS and CEO Event

Can any of the company-specific risk be diversified away by investing in both Arcelik AS and CEO Event 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 Arcelik AS and CEO Event into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arcelik AS and CEO Event Medya, you can compare the effects of market volatilities on Arcelik AS and CEO Event 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 Arcelik AS with a short position of CEO Event. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcelik AS and CEO Event.

Diversification Opportunities for Arcelik AS and CEO Event

0.08

Correlation Coefficient

Arcelik AS  CEO Event

Significant diversification

The 3 months correlation between Arcelik and CEO is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Arcelik AS and CEO Event Medya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Event Medya and Arcelik AS 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 Arcelik AS are associated (or correlated) with CEO Event. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Event Medya has no effect on the direction of Arcelik AS i.e., Arcelik AS and CEO Event go up and down completely randomly.

Pair Corralation between Arcelik AS and CEO Event

Assuming the 90 days trading horizon Arcelik AS is expected to generate 0.49 times more return on investment than CEO Event. However, Arcelik AS is 2.04 times less risky than CEO Event. It trades about 0.09 of its potential returns per unit of risk. CEO Event Medya is currently generating about -0.03 per unit of risk. If you would invest  13,640  in Arcelik AS on January 30, 2024 and sell it today you would earn a total of  3,180  from holding Arcelik AS or generate 23.31% return on investment over 90 days.

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

Arcelik AS  vs.  CEO Event Medya

Arcelik AS

Risk-Adjusted Performance

11 of 100

OK

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

CEO Event Medya

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Arcelik AS and CEO Event

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

The idea behind Arcelik AS and CEO Event Medya 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.