Correlation Between AK Sigorta and Verusa Holding

Can any of the company-specific risk be diversified away by investing in both AK Sigorta and Verusa Holding 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 AK Sigorta and Verusa Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AK Sigorta AS and Verusa Holding AS, you can compare the effects of market volatilities on AK Sigorta and Verusa Holding 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 AK Sigorta with a short position of Verusa Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of AK Sigorta and Verusa Holding.

Diversification Opportunities for AK Sigorta and Verusa Holding

-0.5

Correlation Coefficient

AK Sigorta  Verusa Holding

Very good diversification

The 3 months correlation between AKGRT and Verusa is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AK Sigorta AS and Verusa Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verusa Holding AS and AK Sigorta 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 AK Sigorta AS are associated (or correlated) with Verusa Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verusa Holding AS has no effect on the direction of AK Sigorta i.e., AK Sigorta and Verusa Holding go up and down completely randomly.

Pair Corralation between AK Sigorta and Verusa Holding

Assuming the 90 days trading horizon AK Sigorta AS is expected to generate 0.94 times more return on investment than Verusa Holding. However, AK Sigorta AS is 1.07 times less risky than Verusa Holding. It trades about 0.24 of its potential returns per unit of risk. Verusa Holding AS is currently generating about -0.01 per unit of risk. If you would invest  604.00  in AK Sigorta AS on September 25, 2024 and sell it today you would earn a total of  95.00  from holding AK Sigorta AS or generate 15.73% return on investment over 90 days.

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

AK Sigorta AS  vs.  Verusa Holding AS

AK Sigorta AS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AK Sigorta AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, AK Sigorta demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Verusa Holding AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verusa Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with AK Sigorta and Verusa Holding

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

The idea behind AK Sigorta AS and Verusa Holding AS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.