Correlation Between ENKA Insaat and Ral Yatirim

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

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

Diversification Opportunities for ENKA Insaat and Ral Yatirim

-0.46

Correlation Coefficient

ENKA Insaat  Ral Yatirim

Very good diversification

The 3 months correlation between ENKA and Ral is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding ENKA Insaat ve and Ral Yatirim Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ral Yatirim Holding and ENKA Insaat 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 ENKA Insaat ve are associated (or correlated) with Ral Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ral Yatirim Holding has no effect on the direction of ENKA Insaat i.e., ENKA Insaat and Ral Yatirim go up and down completely randomly.

Pair Corralation between ENKA Insaat and Ral Yatirim

Assuming the 90 days trading horizon ENKA Insaat is expected to generate 2.53 times less return on investment than Ral Yatirim. But when comparing it to its historical volatility, ENKA Insaat ve is 1.27 times less risky than Ral Yatirim. It trades about 0.33 of its potential returns per unit of risk. Ral Yatirim Holding is currently generating about 0.66 of returns per unit of risk over similar time horizon. If you would invest  13,360  in Ral Yatirim Holding on February 3, 2024 and sell it today you would earn a total of  5,340  from holding Ral Yatirim Holding or generate 39.97% return on investment over 90 days.

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

ENKA Insaat ve  vs.  Ral Yatirim Holding

ENKA Insaat ve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ral Yatirim Holding

Risk-Adjusted Performance

36 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Ral Yatirim Holding are ranked lower than 36 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Ral Yatirim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ENKA Insaat and Ral Yatirim

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

The idea behind ENKA Insaat ve and Ral Yatirim Holding 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..