Correlation Between Borlease Otomotiv and Sekerbank TAS

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

Diversification Opportunities for Borlease Otomotiv and Sekerbank TAS

-0.76

Correlation Coefficient

Borlease Otomotiv  Sekerbank TAS

Pay attention - limited upside

The 3 months correlation between Borlease and Sekerbank is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Borlease Otomotiv AS and Sekerbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekerbank TAS 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 Sekerbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekerbank TAS has no effect on the direction of Borlease Otomotiv i.e., Borlease Otomotiv and Sekerbank TAS go up and down completely randomly.

Pair Corralation between Borlease Otomotiv and Sekerbank TAS

Assuming the 90 days trading horizon Borlease Otomotiv AS is expected to generate 1.01 times more return on investment than Sekerbank TAS. However, Borlease Otomotiv is 1.01 times more volatile than Sekerbank TAS. It trades about 0.11 of its potential returns per unit of risk. Sekerbank TAS is currently generating about 0.06 per unit of risk. If you would invest  2,732  in Borlease Otomotiv AS on December 4, 2024 and sell it today you would earn a total of  5,388  from holding Borlease Otomotiv AS or generate 197.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	69.7%
Values	Daily Returns

Borlease Otomotiv AS  vs.  Sekerbank TAS

Borlease Otomotiv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 24 (%) 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.

Sekerbank TAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sekerbank TAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Borlease Otomotiv and Sekerbank TAS

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

The idea behind Borlease Otomotiv AS and Sekerbank TAS 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.