Correlation Between Alkim Alkali and Arcelik AS

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

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

Diversification Opportunities for Alkim Alkali and Arcelik AS

0.44

Correlation Coefficient

Alkim Alkali  Arcelik AS

Very weak diversification

The 3 months correlation between Alkim and Arcelik is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alkim Alkali Kimya and Arcelik AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcelik AS and Alkim Alkali 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 Alkali Kimya are associated (or correlated) with Arcelik AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcelik AS has no effect on the direction of Alkim Alkali i.e., Alkim Alkali and Arcelik AS go up and down completely randomly.

Pair Corralation between Alkim Alkali and Arcelik AS

Assuming the 90 days trading horizon Alkim Alkali Kimya is expected to generate 1.55 times more return on investment than Arcelik AS. However, Alkim Alkali is 1.55 times more volatile than Arcelik AS. It trades about 0.17 of its potential returns per unit of risk. Arcelik AS is currently generating about -0.1 per unit of risk. If you would invest  1,681  in Alkim Alkali Kimya on September 25, 2024 and sell it today you would earn a total of  124.00  from holding Alkim Alkali Kimya or generate 7.38% return on investment over 90 days.

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

Alkim Alkali Kimya  vs.  Arcelik AS

Alkim Alkali Kimya

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Alkali Kimya are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Alkim Alkali may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Arcelik AS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Alkim Alkali and Arcelik AS

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

The idea behind Alkim Alkali Kimya and Arcelik 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.