Correlation Between Alkim Kagit and BIM Birlesik

Can any of the company-specific risk be diversified away by investing in both Alkim Kagit and BIM Birlesik 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 Alkim Kagit and BIM Birlesik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alkim Kagit Sanayi and BIM Birlesik Magazalar, you can compare the effects of market volatilities on Alkim Kagit and BIM Birlesik 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 Alkim Kagit with a short position of BIM Birlesik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkim Kagit and BIM Birlesik.

Diversification Opportunities for Alkim Kagit and BIM Birlesik

0.35

Correlation Coefficient

Alkim Kagit  BIM Birlesik

Weak diversification

The 3 months correlation between Alkim and BIM is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alkim Kagit Sanayi and BIM Birlesik Magazalar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIM Birlesik Magazalar and Alkim Kagit 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 Alkim Kagit Sanayi are associated (or correlated) with BIM Birlesik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIM Birlesik Magazalar has no effect on the direction of Alkim Kagit i.e., Alkim Kagit and BIM Birlesik go up and down completely randomly.

Pair Corralation between Alkim Kagit and BIM Birlesik

Assuming the 90 days trading horizon Alkim Kagit Sanayi is expected to under-perform the BIM Birlesik. In addition to that, Alkim Kagit is 1.1 times more volatile than BIM Birlesik Magazalar. It trades about -0.09 of its total potential returns per unit of risk. BIM Birlesik Magazalar is currently generating about -0.05 per unit of volatility. If you would invest  51,800  in BIM Birlesik Magazalar on December 26, 2024 and sell it today you would lose (6,275) from holding BIM Birlesik Magazalar or give up 12.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Alkim Kagit Sanayi  vs.  BIM Birlesik Magazalar

Alkim Kagit Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alkim Kagit Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BIM Birlesik Magazalar

Risk-Adjusted Performance

Very Weak

Over the last 90 days BIM Birlesik Magazalar has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Alkim Kagit and BIM Birlesik

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

The idea behind Alkim Kagit Sanayi and BIM Birlesik Magazalar 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.