Correlation Between Sonmez Pamuklu and Bms Birlesik

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

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

Diversification Opportunities for Sonmez Pamuklu and Bms Birlesik

-0.41

Correlation Coefficient

Sonmez Pamuklu  Bms Birlesik

Very good diversification

The 3 months correlation between Sonmez and Bms is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sonmez Pamuklu Sanayii and Bms Birlesik Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bms Birlesik Metal and Sonmez Pamuklu 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 Sonmez Pamuklu Sanayii are associated (or correlated) with Bms Birlesik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bms Birlesik Metal has no effect on the direction of Sonmez Pamuklu i.e., Sonmez Pamuklu and Bms Birlesik go up and down completely randomly.

Pair Corralation between Sonmez Pamuklu and Bms Birlesik

Assuming the 90 days trading horizon Sonmez Pamuklu Sanayii is expected to generate 2.5 times more return on investment than Bms Birlesik. However, Sonmez Pamuklu is 2.5 times more volatile than Bms Birlesik Metal. It trades about 0.19 of its potential returns per unit of risk. Bms Birlesik Metal is currently generating about -0.16 per unit of risk. If you would invest  5,730  in Sonmez Pamuklu Sanayii on April 19, 2025 and sell it today you would earn a total of  760.00  from holding Sonmez Pamuklu Sanayii or generate 13.26% return on investment over 90 days.

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

Sonmez Pamuklu Sanayii  vs.  Bms Birlesik Metal

Sonmez Pamuklu Sanayii

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sonmez Pamuklu Sanayii has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

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.

Pair Trading with Sonmez Pamuklu and Bms Birlesik

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

The idea behind Sonmez Pamuklu Sanayii and Bms Birlesik Metal 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.