Correlation Between Coca Cola and Yapi Ve

Can any of the company-specific risk be diversified away by investing in both Coca Cola and Yapi Ve 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 Coca Cola and Yapi Ve into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coca Cola Icecek AS and Yapi ve Kredi, you can compare the effects of market volatilities on Coca Cola and Yapi Ve 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 Coca Cola with a short position of Yapi Ve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Yapi Ve.

Diversification Opportunities for Coca Cola and Yapi Ve

0.8

Correlation Coefficient

Coca Cola  Yapi Ve

Very poor diversification

The 3 months correlation between Coca and Yapi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Icecek AS and Yapi ve Kredi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yapi ve Kredi and Coca Cola 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 Coca Cola Icecek AS are associated (or correlated) with Yapi Ve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yapi ve Kredi has no effect on the direction of Coca Cola i.e., Coca Cola and Yapi Ve go up and down completely randomly.

Pair Corralation between Coca Cola and Yapi Ve

Assuming the 90 days trading horizon Coca Cola Icecek AS is expected to under-perform the Yapi Ve. But the stock apears to be less risky and, when comparing its historical volatility, Coca Cola Icecek AS is 1.5 times less risky than Yapi Ve. The stock trades about -0.24 of its potential returns per unit of risk. The Yapi ve Kredi is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  3,242  in Yapi ve Kredi on October 10, 2024 and sell it today you would lose (184.00) from holding Yapi ve Kredi or give up 5.68% of portfolio value over 90 days.

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

Coca Cola Icecek AS  vs.  Yapi ve Kredi

Coca Cola Icecek

Risk-Adjusted Performance

3 of 100

Insignificant

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

Yapi ve Kredi

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yapi ve Kredi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Yapi Ve demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coca Cola and Yapi Ve

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

The idea behind Coca Cola Icecek AS and Yapi ve Kredi 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.