Correlation Between Eregli Demir and Koza Altin

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

By analyzing existing cross correlation between Eregli Demir ve and Koza Altin Isletmeleri, you can compare the effects of market volatilities on Eregli Demir and Koza Altin 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 Eregli Demir with a short position of Koza Altin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Koza Altin.

Diversification Opportunities for Eregli Demir and Koza Altin

0.3

Correlation Coefficient

Eregli Demir  Koza Altin

Weak diversification

The 3 months correlation between Eregli and Koza is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Koza Altin Isletmeleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koza Altin Isletmeleri and Eregli Demir 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 Eregli Demir ve are associated (or correlated) with Koza Altin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koza Altin Isletmeleri has no effect on the direction of Eregli Demir i.e., Eregli Demir and Koza Altin go up and down completely randomly.

Pair Corralation between Eregli Demir and Koza Altin

Assuming the 90 days trading horizon Eregli Demir ve is expected to under-perform the Koza Altin. But the stock apears to be less risky and, when comparing its historical volatility, Eregli Demir ve is 1.14 times less risky than Koza Altin. The stock trades about -0.04 of its potential returns per unit of risk. The Koza Altin Isletmeleri is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,212  in Koza Altin Isletmeleri on December 30, 2024 and sell it today you would earn a total of  684.00  from holding Koza Altin Isletmeleri or generate 30.92% return on investment over 90 days.

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

Eregli Demir ve  vs.  Koza Altin Isletmeleri

Eregli Demir ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eregli Demir ve 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.

Koza Altin Isletmeleri

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Koza Altin Isletmeleri are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Koza Altin demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eregli Demir and Koza Altin

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

The idea behind Eregli Demir ve and Koza Altin Isletmeleri 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.