Correlation Between Brisa Bridgestone and Alkim Kagit

Can any of the company-specific risk be diversified away by investing in both Brisa Bridgestone and Alkim Kagit 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 Brisa Bridgestone and Alkim Kagit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brisa Bridgestone Sabanci and Alkim Kagit Sanayi, you can compare the effects of market volatilities on Brisa Bridgestone and Alkim Kagit 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 Brisa Bridgestone with a short position of Alkim Kagit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brisa Bridgestone and Alkim Kagit.

Diversification Opportunities for Brisa Bridgestone and Alkim Kagit

0.37

Correlation Coefficient

Brisa Bridgestone  Alkim Kagit

Weak diversification

The 3 months correlation between Brisa and Alkim is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Brisa Bridgestone Sabanci and Alkim Kagit Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Kagit Sanayi and Brisa Bridgestone 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 Brisa Bridgestone Sabanci are associated (or correlated) with Alkim Kagit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Kagit Sanayi has no effect on the direction of Brisa Bridgestone i.e., Brisa Bridgestone and Alkim Kagit go up and down completely randomly.

Pair Corralation between Brisa Bridgestone and Alkim Kagit

Assuming the 90 days trading horizon Brisa Bridgestone Sabanci is expected to generate 0.65 times more return on investment than Alkim Kagit. However, Brisa Bridgestone Sabanci is 1.55 times less risky than Alkim Kagit. It trades about 0.0 of its potential returns per unit of risk. Alkim Kagit Sanayi is currently generating about -0.11 per unit of risk. If you would invest  8,600  in Brisa Bridgestone Sabanci on December 21, 2024 and sell it today you would lose (115.00) from holding Brisa Bridgestone Sabanci or give up 1.34% of portfolio value over 90 days.

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

Brisa Bridgestone Sabanci  vs.  Alkim Kagit Sanayi

Brisa Bridgestone Sabanci

Risk-Adjusted Performance

Very Weak

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

Alkim Kagit Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alkim Kagit Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Brisa Bridgestone and Alkim Kagit

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

The idea behind Brisa Bridgestone Sabanci and Alkim Kagit 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.