Correlation Between Vakif Menkul and Desa Deri

Can any of the company-specific risk be diversified away by investing in both Vakif Menkul and Desa Deri 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 Desa Deri 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 Desa Deri Sanayi, you can compare the effects of market volatilities on Vakif Menkul and Desa Deri 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 Desa Deri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vakif Menkul and Desa Deri.

Diversification Opportunities for Vakif Menkul and Desa Deri

-0.63

Correlation Coefficient

Vakif Menkul  Desa Deri

Excellent diversification

The 3 months correlation between Vakif and Desa is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vakif Menkul Kiymet and Desa Deri Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desa Deri Sanayi 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 Desa Deri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desa Deri Sanayi has no effect on the direction of Vakif Menkul i.e., Vakif Menkul and Desa Deri go up and down completely randomly.

Pair Corralation between Vakif Menkul and Desa Deri

Assuming the 90 days trading horizon Vakif Menkul is expected to generate 7.28 times less return on investment than Desa Deri. But when comparing it to its historical volatility, Vakif Menkul Kiymet is 1.19 times less risky than Desa Deri. It trades about 0.06 of its potential returns per unit of risk. Desa Deri Sanayi is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  2,378  in Desa Deri Sanayi on January 29, 2024 and sell it today you would earn a total of  570.00  from holding Desa Deri Sanayi or generate 23.97% 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.  Desa Deri Sanayi

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Desa Deri Sanayi

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Desa Deri Sanayi are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Desa Deri unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vakif Menkul and Desa Deri

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

The idea behind Vakif Menkul Kiymet and Desa Deri 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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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.