Correlation Between GSD Holding and Koza Anadolu

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

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

Diversification Opportunities for GSD Holding and Koza Anadolu

0.93

Correlation Coefficient

GSD Holding  Koza Anadolu

Almost no diversification

The 3 months correlation between GSD and Koza is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding GSD Holding AS 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 GSD Holding 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 GSD Holding AS 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 GSD Holding i.e., GSD Holding and Koza Anadolu go up and down completely randomly.

Pair Corralation between GSD Holding and Koza Anadolu

Assuming the 90 days trading horizon GSD Holding AS is expected to under-perform the Koza Anadolu. But the stock apears to be less risky and, when comparing its historical volatility, GSD Holding AS is 1.67 times less risky than Koza Anadolu. The stock trades about -0.01 of its potential returns per unit of risk. The Koza Anadolu Metal is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,750  in Koza Anadolu Metal on October 4, 2024 and sell it today you would earn a total of  1,675  from holding Koza Anadolu Metal or generate 29.13% return on investment over 90 days.

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

GSD Holding AS  vs.  Koza Anadolu Metal

GSD Holding AS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GSD Holding AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, GSD Holding may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Koza Anadolu Metal

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Koza Anadolu Metal are ranked lower than 11 (%) 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 GSD Holding and Koza Anadolu

The main advantage of trading using opposite GSD Holding and Koza Anadolu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSD Holding 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 GSD Holding AS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.