Correlation Between BIM Birlesik and Koc Holding

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

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

Diversification Opportunities for BIM Birlesik and Koc Holding

0.34

Correlation Coefficient

BIM Birlesik  Koc Holding

Weak diversification

The 3 months correlation between BIM and Koc is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding BIM Birlesik Magazalar and Koc Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koc Holding AS and BIM Birlesik 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 BIM Birlesik Magazalar are associated (or correlated) with Koc Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koc Holding AS has no effect on the direction of BIM Birlesik i.e., BIM Birlesik and Koc Holding go up and down completely randomly.

Pair Corralation between BIM Birlesik and Koc Holding

Assuming the 90 days trading horizon BIM Birlesik Magazalar is expected to generate 1.14 times more return on investment than Koc Holding. However, BIM Birlesik is 1.14 times more volatile than Koc Holding AS. It trades about -0.05 of its potential returns per unit of risk. Koc Holding AS is currently generating about -0.08 per unit of risk. If you would invest  61,456  in BIM Birlesik Magazalar on October 22, 2024 and sell it today you would lose (10,556) from holding BIM Birlesik Magazalar or give up 17.18% of portfolio value over 90 days.

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

BIM Birlesik Magazalar  vs.  Koc Holding AS

BIM Birlesik Magazalar

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BIM Birlesik Magazalar are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, BIM Birlesik may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Koc Holding AS

Risk-Adjusted Performance

2 of 100

Insignificant

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

Pair Trading with BIM Birlesik and Koc Holding

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

The idea behind BIM Birlesik Magazalar and Koc Holding 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.