Correlation Between Vakif Menkul and ERSU Meyve

Can any of the company-specific risk be diversified away by investing in both Vakif Menkul and ERSU Meyve 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 Vakif Menkul and ERSU Meyve into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vakif Menkul Kiymet and ERSU Meyve ve, you can compare the effects of market volatilities on Vakif Menkul and ERSU Meyve 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 Vakif Menkul with a short position of ERSU Meyve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vakif Menkul and ERSU Meyve.

Diversification Opportunities for Vakif Menkul and ERSU Meyve

-0.67

Correlation Coefficient

Vakif Menkul  ERSU Meyve

Excellent diversification

The 3 months correlation between Vakif and ERSU is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vakif Menkul Kiymet and ERSU Meyve ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ERSU Meyve ve and Vakif Menkul 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 Vakif Menkul Kiymet are associated (or correlated) with ERSU Meyve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ERSU Meyve ve has no effect on the direction of Vakif Menkul i.e., Vakif Menkul and ERSU Meyve go up and down completely randomly.

Pair Corralation between Vakif Menkul and ERSU Meyve

Assuming the 90 days trading horizon Vakif Menkul Kiymet is expected to generate 0.47 times more return on investment than ERSU Meyve. However, Vakif Menkul Kiymet is 2.11 times less risky than ERSU Meyve. It trades about 0.26 of its potential returns per unit of risk. ERSU Meyve ve is currently generating about -0.13 per unit of risk. If you would invest  2,056  in Vakif Menkul Kiymet on February 2, 2024 and sell it today you would earn a total of  232.00  from holding Vakif Menkul Kiymet or generate 11.28% return on investment over 90 days.

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

Vakif Menkul Kiymet  vs.  ERSU Meyve ve

Vakif Menkul Kiymet

Risk-Adjusted Performance

0 of 100

Very Weak

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

ERSU Meyve ve

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ERSU Meyve ve are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, ERSU Meyve unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vakif Menkul and ERSU Meyve

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

The idea behind Vakif Menkul Kiymet and ERSU Meyve 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.