Correlation Between Gentas Genel and Koc Holding

Can any of the company-specific risk be diversified away by investing in both Gentas Genel and Koc Holding 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 Gentas Genel and Koc Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gentas Genel Metal and Koc Holding AS, you can compare the effects of market volatilities on Gentas Genel and Koc Holding 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 Gentas Genel with a short position of Koc Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentas Genel and Koc Holding.

Diversification Opportunities for Gentas Genel and Koc Holding

0.66

Correlation Coefficient

Gentas Genel  Koc Holding

Poor diversification

The 3 months correlation between Gentas and Koc is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gentas Genel Metal and Koc Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koc Holding AS and Gentas Genel 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 Gentas Genel Metal are associated (or correlated) with Koc Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koc Holding AS has no effect on the direction of Gentas Genel i.e., Gentas Genel and Koc Holding go up and down completely randomly.

Pair Corralation between Gentas Genel and Koc Holding

Assuming the 90 days trading horizon Gentas Genel Metal is expected to generate 1.11 times more return on investment than Koc Holding. However, Gentas Genel is 1.11 times more volatile than Koc Holding AS. It trades about 0.4 of its potential returns per unit of risk. Koc Holding AS is currently generating about -0.1 per unit of risk. If you would invest  816.00  in Gentas Genel Metal on September 22, 2024 and sell it today you would earn a total of  127.00  from holding Gentas Genel Metal or generate 15.56% return on investment over 90 days.

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

Gentas Genel Metal  vs.  Koc Holding AS

Gentas Genel Metal

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gentas Genel Metal are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gentas Genel demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Koc Holding AS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gentas Genel and Koc Holding

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

The idea behind Gentas Genel Metal and Koc Holding AS 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.