Correlation Between Alarko Carrier and Koza Anadolu

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

By analyzing existing cross correlation between Alarko Carrier Sanayi and Koza Anadolu Metal, you can compare the effects of market volatilities on Alarko Carrier and Koza Anadolu 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 Carrier with a short position of Koza Anadolu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alarko Carrier and Koza Anadolu.

Diversification Opportunities for Alarko Carrier and Koza Anadolu

0.76

Correlation Coefficient

Alarko Carrier  Koza Anadolu

Poor diversification

The 3 months correlation between Alarko and Koza is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Alarko Carrier Sanayi and Koza Anadolu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koza Anadolu Metal and Alarko Carrier 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 Carrier Sanayi are associated (or correlated) with Koza Anadolu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koza Anadolu Metal has no effect on the direction of Alarko Carrier i.e., Alarko Carrier and Koza Anadolu go up and down completely randomly.

Pair Corralation between Alarko Carrier and Koza Anadolu

Assuming the 90 days trading horizon Alarko Carrier Sanayi is expected to under-perform the Koza Anadolu. But the stock apears to be less risky and, when comparing its historical volatility, Alarko Carrier Sanayi is 1.45 times less risky than Koza Anadolu. The stock trades about -0.03 of its potential returns per unit of risk. The Koza Anadolu Metal is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  6,785  in Koza Anadolu Metal on September 16, 2024 and sell it today you would earn a total of  265.00  from holding Koza Anadolu Metal or generate 3.91% return on investment over 90 days.

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

Alarko Carrier Sanayi  vs.  Koza Anadolu Metal

Alarko Carrier Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Koza Anadolu Metal

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Koza Anadolu Metal are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Koza Anadolu is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alarko Carrier and Koza Anadolu

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

The idea behind Alarko Carrier Sanayi and Koza Anadolu Metal 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.