Correlation Between Turkiye Halk and Koc Holding

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

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

Diversification Opportunities for Turkiye Halk and Koc Holding

0.69

Correlation Coefficient

Turkiye Halk  Koc Holding

Poor diversification

The 3 months correlation between Turkiye and Koc is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Halk Bankasi 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 Turkiye Halk 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 Turkiye Halk Bankasi 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 Turkiye Halk i.e., Turkiye Halk and Koc Holding go up and down completely randomly.

Pair Corralation between Turkiye Halk and Koc Holding

Assuming the 90 days trading horizon Turkiye Halk is expected to generate 3.63 times less return on investment than Koc Holding. But when comparing it to its historical volatility, Turkiye Halk Bankasi is 1.08 times less risky than Koc Holding. It trades about 0.03 of its potential returns per unit of risk. Koc Holding AS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  17,200  in Koc Holding AS on September 14, 2024 and sell it today you would earn a total of  2,400  from holding Koc Holding AS or generate 13.95% return on investment over 90 days.

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

Turkiye Halk Bankasi  vs.  Koc Holding AS

Turkiye Halk Bankasi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Halk Bankasi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turkiye Halk is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Koc Holding AS

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Turkiye Halk and Koc Holding

The main advantage of trading using opposite Turkiye Halk and Koc Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Halk 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 Turkiye Halk Bankasi 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.