Correlation Between Alarko Holding and Aksa Enerji

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

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

Diversification Opportunities for Alarko Holding and Aksa Enerji

0.46

Correlation Coefficient

Alarko Holding  Aksa Enerji

Very weak diversification

The 3 months correlation between Alarko and Aksa is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alarko Holding AS and Aksa Enerji Uretim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aksa Enerji Uretim and Alarko Holding 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 Alarko Holding AS are associated (or correlated) with Aksa Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aksa Enerji Uretim has no effect on the direction of Alarko Holding i.e., Alarko Holding and Aksa Enerji go up and down completely randomly.

Pair Corralation between Alarko Holding and Aksa Enerji

Assuming the 90 days trading horizon Alarko Holding AS is expected to under-perform the Aksa Enerji. But the stock apears to be less risky and, when comparing its historical volatility, Alarko Holding AS is 1.04 times less risky than Aksa Enerji. The stock trades about 0.0 of its potential returns per unit of risk. The Aksa Enerji Uretim is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,366  in Aksa Enerji Uretim on September 22, 2024 and sell it today you would earn a total of  230.00  from holding Aksa Enerji Uretim or generate 6.83% return on investment over 90 days.

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

Alarko Holding AS  vs.  Aksa Enerji Uretim

Alarko Holding AS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alarko Holding AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Alarko Holding is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Aksa Enerji Uretim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aksa Enerji Uretim has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Aksa Enerji is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alarko Holding and Aksa Enerji

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

The idea behind Alarko Holding AS and Aksa Enerji Uretim 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.