Correlation Between Borlease Otomotiv and Alarko Carrier

Can any of the company-specific risk be diversified away by investing in both Borlease Otomotiv and Alarko Carrier 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 Borlease Otomotiv and Alarko Carrier into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Borlease Otomotiv AS and Alarko Carrier Sanayi, you can compare the effects of market volatilities on Borlease Otomotiv and Alarko Carrier 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 Borlease Otomotiv with a short position of Alarko Carrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borlease Otomotiv and Alarko Carrier.

Diversification Opportunities for Borlease Otomotiv and Alarko Carrier

0.6

Correlation Coefficient

Borlease Otomotiv  Alarko Carrier

Poor diversification

The 3 months correlation between Borlease and Alarko is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Borlease Otomotiv AS and Alarko Carrier Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarko Carrier Sanayi and Borlease Otomotiv 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 Borlease Otomotiv AS are associated (or correlated) with Alarko Carrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarko Carrier Sanayi has no effect on the direction of Borlease Otomotiv i.e., Borlease Otomotiv and Alarko Carrier go up and down completely randomly.

Pair Corralation between Borlease Otomotiv and Alarko Carrier

Assuming the 90 days trading horizon Borlease Otomotiv AS is expected to generate 1.12 times more return on investment than Alarko Carrier. However, Borlease Otomotiv is 1.12 times more volatile than Alarko Carrier Sanayi. It trades about 0.19 of its potential returns per unit of risk. Alarko Carrier Sanayi is currently generating about -0.1 per unit of risk. If you would invest  3,428  in Borlease Otomotiv AS on September 23, 2024 and sell it today you would earn a total of  3,187  from holding Borlease Otomotiv AS or generate 92.97% return on investment over 90 days.

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

Borlease Otomotiv AS  vs.  Alarko Carrier Sanayi

Borlease Otomotiv

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Borlease Otomotiv demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Alarko Carrier Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Borlease Otomotiv and Alarko Carrier

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

The idea behind Borlease Otomotiv AS and Alarko Carrier Sanayi 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.