Correlation Between Anadolu Efes and Ege Gubre

Can any of the company-specific risk be diversified away by investing in both Anadolu Efes and Ege Gubre 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 Anadolu Efes and Ege Gubre into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anadolu Efes Biracilik and Ege Gubre Sanayi, you can compare the effects of market volatilities on Anadolu Efes and Ege Gubre 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 Anadolu Efes with a short position of Ege Gubre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anadolu Efes and Ege Gubre.

Diversification Opportunities for Anadolu Efes and Ege Gubre

0.79

Correlation Coefficient

Anadolu Efes Ege Gubre

Poor diversification

The 3 months correlation between Anadolu and EGGUB is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Anadolu Efes Biracilik and Ege Gubre Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Gubre Sanayi and Anadolu Efes 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 Anadolu Efes Biracilik are associated (or correlated) with Ege Gubre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Gubre Sanayi has no effect on the direction of Anadolu Efes i.e., Anadolu Efes and Ege Gubre go up and down completely randomly.

Pair Corralation between Anadolu Efes and Ege Gubre

Assuming the 90 days trading horizon Anadolu Efes Biracilik is expected to generate 0.76 times more return on investment than Ege Gubre. However, Anadolu Efes Biracilik is 1.31 times less risky than Ege Gubre. It trades about 0.11 of its potential returns per unit of risk. Ege Gubre Sanayi is currently generating about 0.04 per unit of risk. If you would invest  1,868  in Anadolu Efes Biracilik on December 23, 2022 and sell it today you would earn a total of  4,227  from holding Anadolu Efes Biracilik or generate 226.28% return on investment over 90 days.

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

Anadolu Efes Biracilik  vs.  Ege Gubre Sanayi

Anadolu Efes Biracilik

Anadolu Performance

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Over the last 90 days Anadolu Efes Biracilik 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.

Ege Gubre Sanayi

EGGUB Performance

0 of 100

Over the last 90 days Ege Gubre Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in April 2023. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Anadolu Efes and Ege Gubre

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

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The idea behind Anadolu Efes Biracilik and Ege Gubre Sanayi 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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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.