Correlation Between Cosmos Yatirim and Eregli Demir

Can any of the company-specific risk be diversified away by investing in both Cosmos Yatirim and Eregli Demir 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 Cosmos Yatirim and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cosmos Yatirim Holding and Eregli Demir ve, you can compare the effects of market volatilities on Cosmos Yatirim and Eregli Demir 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 Cosmos Yatirim with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Yatirim and Eregli Demir.

Diversification Opportunities for Cosmos Yatirim and Eregli Demir

0.59

Correlation Coefficient

Cosmos Yatirim  Eregli Demir

Very weak diversification

The 3 months correlation between Cosmos and Eregli is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Yatirim Holding and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and Cosmos Yatirim 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 Cosmos Yatirim Holding are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Cosmos Yatirim i.e., Cosmos Yatirim and Eregli Demir go up and down completely randomly.

Pair Corralation between Cosmos Yatirim and Eregli Demir

Assuming the 90 days trading horizon Cosmos Yatirim Holding is expected to generate 2.0 times more return on investment than Eregli Demir. However, Cosmos Yatirim is 2.0 times more volatile than Eregli Demir ve. It trades about 0.2 of its potential returns per unit of risk. Eregli Demir ve is currently generating about 0.26 per unit of risk. If you would invest  13,100  in Cosmos Yatirim Holding on February 6, 2024 and sell it today you would earn a total of  1,300  from holding Cosmos Yatirim Holding or generate 9.92% return on investment over 90 days.

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

Cosmos Yatirim Holding  vs.  Eregli Demir ve

Cosmos Yatirim Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Yatirim Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Cosmos Yatirim is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Eregli Demir ve

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eregli Demir ve are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong essential indicators, Eregli Demir is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cosmos Yatirim and Eregli Demir

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

The idea behind Cosmos Yatirim Holding and Eregli Demir ve 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.