Correlation Between Hektas Ticaret and Kardemir Karabuk

Can any of the company-specific risk be diversified away by investing in both Hektas Ticaret and Kardemir Karabuk 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 Hektas Ticaret and Kardemir Karabuk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hektas Ticaret TAS and Kardemir Karabuk Demir, you can compare the effects of market volatilities on Hektas Ticaret and Kardemir Karabuk 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 Hektas Ticaret with a short position of Kardemir Karabuk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hektas Ticaret and Kardemir Karabuk.

Diversification Opportunities for Hektas Ticaret and Kardemir Karabuk

0.7

Correlation Coefficient

Hektas Ticaret  Kardemir Karabuk

Poor diversification

The 3 months correlation between Hektas and Kardemir is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hektas Ticaret TAS and Kardemir Karabuk Demir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardemir Karabuk Demir and Hektas Ticaret 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 Hektas Ticaret TAS are associated (or correlated) with Kardemir Karabuk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardemir Karabuk Demir has no effect on the direction of Hektas Ticaret i.e., Hektas Ticaret and Kardemir Karabuk go up and down completely randomly.

Pair Corralation between Hektas Ticaret and Kardemir Karabuk

Assuming the 90 days trading horizon Hektas Ticaret TAS is expected to generate 1.77 times more return on investment than Kardemir Karabuk. However, Hektas Ticaret is 1.77 times more volatile than Kardemir Karabuk Demir. It trades about -0.06 of its potential returns per unit of risk. Kardemir Karabuk Demir is currently generating about -0.31 per unit of risk. If you would invest  419.00  in Hektas Ticaret TAS on October 14, 2024 and sell it today you would lose (19.00) from holding Hektas Ticaret TAS or give up 4.53% of portfolio value over 90 days.

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

Hektas Ticaret TAS  vs.  Kardemir Karabuk Demir

Hektas Ticaret TAS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hektas Ticaret TAS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Hektas Ticaret may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kardemir Karabuk Demir

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Hektas Ticaret and Kardemir Karabuk

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

The idea behind Hektas Ticaret TAS and Kardemir Karabuk Demir 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.