Correlation Between Borlease Otomotiv and MMC Sanayi

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

Diversification Opportunities for Borlease Otomotiv and MMC Sanayi

0.27

Correlation Coefficient

Borlease Otomotiv  MMC Sanayi

Modest diversification

The 3 months correlation between Borlease and MMC is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Borlease Otomotiv AS and MMC Sanayi ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MMC Sanayi ve 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 MMC Sanayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MMC Sanayi ve has no effect on the direction of Borlease Otomotiv i.e., Borlease Otomotiv and MMC Sanayi go up and down completely randomly.

Pair Corralation between Borlease Otomotiv and MMC Sanayi

Assuming the 90 days trading horizon Borlease Otomotiv AS is expected to generate 0.81 times more return on investment than MMC Sanayi. However, Borlease Otomotiv AS is 1.23 times less risky than MMC Sanayi. It trades about 0.15 of its potential returns per unit of risk. MMC Sanayi ve is currently generating about 0.05 per unit of risk. If you would invest  6,480  in Borlease Otomotiv AS on December 24, 2024 and sell it today you would earn a total of  1,540  from holding Borlease Otomotiv AS or generate 23.77% return on investment over 90 days.

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

Borlease Otomotiv AS  vs.  MMC Sanayi ve

Borlease Otomotiv

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 11 (%) 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.

MMC Sanayi ve

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MMC Sanayi ve are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, MMC Sanayi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Borlease Otomotiv and MMC Sanayi

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

The idea behind Borlease Otomotiv AS and MMC Sanayi 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.