Correlation Between BIM Birlesik and Otokar Otomotiv

Can any of the company-specific risk be diversified away by investing in both BIM Birlesik and Otokar Otomotiv 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 Otokar Otomotiv 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 Otokar Otomotiv ve, you can compare the effects of market volatilities on BIM Birlesik and Otokar Otomotiv 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 Otokar Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIM Birlesik and Otokar Otomotiv.

Diversification Opportunities for BIM Birlesik and Otokar Otomotiv

-0.49

Correlation Coefficient

BIM Birlesik  Otokar Otomotiv

Very good diversification

The 3 months correlation between BIM and Otokar is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BIM Birlesik Magazalar and Otokar Otomotiv ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otokar Otomotiv ve 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 Otokar Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otokar Otomotiv ve has no effect on the direction of BIM Birlesik i.e., BIM Birlesik and Otokar Otomotiv go up and down completely randomly.

Pair Corralation between BIM Birlesik and Otokar Otomotiv

Assuming the 90 days trading horizon BIM Birlesik Magazalar is expected to under-perform the Otokar Otomotiv. In addition to that, BIM Birlesik is 1.87 times more volatile than Otokar Otomotiv ve. It trades about -0.03 of its total potential returns per unit of risk. Otokar Otomotiv ve is currently generating about 0.08 per unit of volatility. If you would invest  40,200  in Otokar Otomotiv ve on December 4, 2024 and sell it today you would earn a total of  800.00  from holding Otokar Otomotiv ve or generate 1.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

BIM Birlesik Magazalar  vs.  Otokar Otomotiv ve

BIM Birlesik Magazalar

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BIM Birlesik Magazalar are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, BIM Birlesik is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Otokar Otomotiv ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Otokar Otomotiv ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with BIM Birlesik and Otokar Otomotiv

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

The idea behind BIM Birlesik Magazalar and Otokar Otomotiv ve 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.