Correlation Between Akbank Turk and Idemitsu Kosan

Can any of the company-specific risk be diversified away by investing in both Akbank Turk and Idemitsu Kosan 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 Akbank Turk and Idemitsu Kosan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akbank Turk Anonim and Idemitsu Kosan Co, you can compare the effects of market volatilities on Akbank Turk and Idemitsu Kosan 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 Akbank Turk with a short position of Idemitsu Kosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akbank Turk and Idemitsu Kosan.

Diversification Opportunities for Akbank Turk and Idemitsu Kosan

-0.23

Correlation Coefficient

Akbank Turk  Idemitsu Kosan

Very good diversification

The 3 months correlation between Akbank and Idemitsu is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Akbank Turk Anonim and Idemitsu Kosan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idemitsu Kosan and Akbank Turk 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 Akbank Turk Anonim are associated (or correlated) with Idemitsu Kosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idemitsu Kosan has no effect on the direction of Akbank Turk i.e., Akbank Turk and Idemitsu Kosan go up and down completely randomly.

Pair Corralation between Akbank Turk and Idemitsu Kosan

Assuming the 90 days horizon Akbank Turk Anonim is expected to generate 0.96 times more return on investment than Idemitsu Kosan. However, Akbank Turk Anonim is 1.05 times less risky than Idemitsu Kosan. It trades about 0.11 of its potential returns per unit of risk. Idemitsu Kosan Co is currently generating about 0.0 per unit of risk. If you would invest  318.00  in Akbank Turk Anonim on October 26, 2024 and sell it today you would earn a total of  64.00  from holding Akbank Turk Anonim or generate 20.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Akbank Turk Anonim  vs.  Idemitsu Kosan Co

Akbank Turk Anonim

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank Turk Anonim are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Akbank Turk showed solid returns over the last few months and may actually be approaching a breakup point.

Idemitsu Kosan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idemitsu Kosan Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Idemitsu Kosan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Akbank Turk and Idemitsu Kosan

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

The idea behind Akbank Turk Anonim and Idemitsu Kosan Co 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.