Correlation Between Ford Otomotiv and Koza Altin

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

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

Diversification Opportunities for Ford Otomotiv and Koza Altin

-0.17

Correlation Coefficient

Ford Otomotiv  Koza Altin

Good diversification

The 3 months correlation between Ford and Koza is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ford Otomotiv Sanayi 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 Ford 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 Ford Otomotiv Sanayi 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 Ford Otomotiv i.e., Ford Otomotiv and Koza Altin go up and down completely randomly.

Pair Corralation between Ford Otomotiv and Koza Altin

Assuming the 90 days trading horizon Ford Otomotiv is expected to generate 9.99 times less return on investment than Koza Altin. But when comparing it to its historical volatility, Ford Otomotiv Sanayi is 18.31 times less risky than Koza Altin. It trades about 0.07 of its potential returns per unit of risk. Koza Altin Isletmeleri is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,608  in Koza Altin Isletmeleri on September 26, 2024 and sell it today you would lose (436.00) from holding Koza Altin Isletmeleri or give up 16.72% of portfolio value over 90 days.

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

Ford Otomotiv Sanayi  vs.  Koza Altin Isletmeleri

Ford Otomotiv Sanayi

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Otomotiv Sanayi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Ford Otomotiv is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Koza Altin Isletmeleri

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ford Otomotiv and Koza Altin

The main advantage of trading using opposite Ford Otomotiv and Koza Altin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford Otomotiv 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 Ford Otomotiv Sanayi 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.