Correlation Between Alkim Kagit and Datagate Bilgisayar

Can any of the company-specific risk be diversified away by investing in both Alkim Kagit and Datagate Bilgisayar 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 Datagate Bilgisayar 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 Datagate Bilgisayar Malzemeleri, you can compare the effects of market volatilities on Alkim Kagit and Datagate Bilgisayar 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 Datagate Bilgisayar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkim Kagit and Datagate Bilgisayar.

Diversification Opportunities for Alkim Kagit and Datagate Bilgisayar

0.53

Correlation Coefficient

Alkim Kagit  Datagate Bilgisayar

Very weak diversification

The 3 months correlation between Alkim and Datagate is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Alkim Kagit Sanayi and Datagate Bilgisayar Malzemeler in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagate Bilgisayar 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 Datagate Bilgisayar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagate Bilgisayar has no effect on the direction of Alkim Kagit i.e., Alkim Kagit and Datagate Bilgisayar go up and down completely randomly.

Pair Corralation between Alkim Kagit and Datagate Bilgisayar

Assuming the 90 days trading horizon Alkim Kagit is expected to generate 1.55 times less return on investment than Datagate Bilgisayar. But when comparing it to its historical volatility, Alkim Kagit Sanayi is 1.23 times less risky than Datagate Bilgisayar. It trades about 0.06 of its potential returns per unit of risk. Datagate Bilgisayar Malzemeleri is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,618  in Datagate Bilgisayar Malzemeleri on October 5, 2024 and sell it today you would earn a total of  2,046  from holding Datagate Bilgisayar Malzemeleri or generate 78.15% return on investment over 90 days.

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

Alkim Kagit Sanayi  vs.  Datagate Bilgisayar Malzemeler

Alkim Kagit Sanayi

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Kagit Sanayi are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Alkim Kagit unveiled solid returns over the last few months and may actually be approaching a breakup point.

Datagate Bilgisayar

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Datagate Bilgisayar Malzemeleri are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Datagate Bilgisayar demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alkim Kagit and Datagate Bilgisayar

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

The idea behind Alkim Kagit Sanayi and Datagate Bilgisayar Malzemeleri 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.