Correlation Between Bms Birlesik and DCT TRADING

Can any of the company-specific risk be diversified away by investing in both Bms Birlesik and DCT TRADING 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 Bms Birlesik and DCT TRADING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bms Birlesik Metal and DCT TRADING DIS, you can compare the effects of market volatilities on Bms Birlesik and DCT TRADING 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 Bms Birlesik with a short position of DCT TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bms Birlesik and DCT TRADING.

Diversification Opportunities for Bms Birlesik and DCT TRADING

0.54

Correlation Coefficient

Bms Birlesik  DCT TRADING

Very weak diversification

The 3 months correlation between Bms and DCT is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bms Birlesik Metal and DCT TRADING DIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCT TRADING DIS and Bms Birlesik 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 Bms Birlesik Metal are associated (or correlated) with DCT TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCT TRADING DIS has no effect on the direction of Bms Birlesik i.e., Bms Birlesik and DCT TRADING go up and down completely randomly.

Pair Corralation between Bms Birlesik and DCT TRADING

Assuming the 90 days trading horizon Bms Birlesik Metal is expected to under-perform the DCT TRADING. But the stock apears to be less risky and, when comparing its historical volatility, Bms Birlesik Metal is 1.08 times less risky than DCT TRADING. The stock trades about -0.01 of its potential returns per unit of risk. The DCT TRADING DIS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,702  in DCT TRADING DIS on April 23, 2025 and sell it today you would lose (100.00) from holding DCT TRADING DIS or give up 2.7% of portfolio value over 90 days.

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

Bms Birlesik Metal  vs.  DCT TRADING DIS

Bms Birlesik Metal

Risk-Adjusted Performance

Very Weak

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

DCT TRADING DIS

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bms Birlesik and DCT TRADING

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

The idea behind Bms Birlesik Metal and DCT TRADING DIS 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.