Correlation Between Vestel Elektronik and Vakif Menkul

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

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

Diversification Opportunities for Vestel Elektronik and Vakif Menkul

0.11

Correlation Coefficient

Vestel Elektronik  Vakif Menkul

Average diversification

The 3 months correlation between Vestel and Vakif is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Vestel Elektronik Sanayi and Vakif Menkul Kiymet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vakif Menkul Kiymet and Vestel Elektronik 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 Vestel Elektronik Sanayi are associated (or correlated) with Vakif Menkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vakif Menkul Kiymet has no effect on the direction of Vestel Elektronik i.e., Vestel Elektronik and Vakif Menkul go up and down completely randomly.

Pair Corralation between Vestel Elektronik and Vakif Menkul

Assuming the 90 days trading horizon Vestel Elektronik Sanayi is expected to under-perform the Vakif Menkul. But the stock apears to be less risky and, when comparing its historical volatility, Vestel Elektronik Sanayi is 1.35 times less risky than Vakif Menkul. The stock trades about -0.28 of its potential returns per unit of risk. The Vakif Menkul Kiymet is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,488  in Vakif Menkul Kiymet on March 20, 2024 and sell it today you would earn a total of  68.00  from holding Vakif Menkul Kiymet or generate 2.73% return on investment over 90 days.

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

Vestel Elektronik Sanayi  vs.  Vakif Menkul Kiymet

Vestel Elektronik Sanayi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vestel Elektronik Sanayi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, Vestel Elektronik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Vakif Menkul Kiymet

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vakif Menkul Kiymet are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Vakif Menkul demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vestel Elektronik and Vakif Menkul

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

The idea behind Vestel Elektronik Sanayi and Vakif Menkul Kiymet 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.