Correlation Between Burcelik Vana and Koza Anadolu

Can any of the company-specific risk be diversified away by investing in both Burcelik Vana 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 Burcelik Vana and Koza Anadolu into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Burcelik Vana Sanayi and Koza Anadolu Metal, you can compare the effects of market volatilities on Burcelik Vana 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 Burcelik Vana with a short position of Koza Anadolu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burcelik Vana and Koza Anadolu.

Diversification Opportunities for Burcelik Vana and Koza Anadolu

-0.69

Correlation Coefficient

Burcelik Vana  Koza Anadolu

Excellent diversification

The 3 months correlation between Burcelik and Koza is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Burcelik Vana Sanayi 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 Burcelik Vana 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 Burcelik Vana Sanayi 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 Burcelik Vana i.e., Burcelik Vana and Koza Anadolu go up and down completely randomly.

Pair Corralation between Burcelik Vana and Koza Anadolu

Assuming the 90 days trading horizon Burcelik Vana Sanayi is expected to generate 1.41 times more return on investment than Koza Anadolu. However, Burcelik Vana is 1.41 times more volatile than Koza Anadolu Metal. It trades about 0.07 of its potential returns per unit of risk. Koza Anadolu Metal is currently generating about 0.04 per unit of risk. If you would invest  3,384  in Burcelik Vana Sanayi on October 4, 2024 and sell it today you would earn a total of  7,726  from holding Burcelik Vana Sanayi or generate 228.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Burcelik Vana Sanayi  vs.  Koza Anadolu Metal

Burcelik Vana Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Burcelik Vana Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Koza Anadolu Metal

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Koza Anadolu Metal are ranked lower than 9 (%) 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 Burcelik Vana and Koza Anadolu

The main advantage of trading using opposite Burcelik Vana and Koza Anadolu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burcelik Vana 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 Burcelik Vana Sanayi 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.