Correlation Between Borlease Otomotiv and Koza Anadolu

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

Diversification Opportunities for Borlease Otomotiv and Koza Anadolu

0.66

Correlation Coefficient

Borlease Otomotiv  Koza Anadolu

Poor diversification

The 3 months correlation between Borlease and Koza is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Borlease Otomotiv AS and Koza Anadolu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koza Anadolu Metal 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 Koza Anadolu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koza Anadolu Metal has no effect on the direction of Borlease Otomotiv i.e., Borlease Otomotiv and Koza Anadolu go up and down completely randomly.

Pair Corralation between Borlease Otomotiv and Koza Anadolu

Assuming the 90 days trading horizon Borlease Otomotiv AS is expected to generate 1.03 times more return on investment than Koza Anadolu. However, Borlease Otomotiv is 1.03 times more volatile than Koza Anadolu Metal. It trades about 0.19 of its potential returns per unit of risk. Koza Anadolu Metal is currently generating about 0.13 per unit of risk. If you would invest  6,945  in Borlease Otomotiv AS on December 29, 2024 and sell it today you would earn a total of  2,695  from holding Borlease Otomotiv AS or generate 38.8% 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.  Koza Anadolu Metal

Borlease Otomotiv

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Borlease Otomotiv demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Koza Anadolu Metal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Koza Anadolu Metal are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Koza Anadolu demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Borlease Otomotiv and Koza Anadolu

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

The idea behind Borlease Otomotiv AS and Koza Anadolu Metal 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.