Correlation Between Hektas Ticaret and Soktas Tekstil

Can any of the company-specific risk be diversified away by investing in both Hektas Ticaret and Soktas Tekstil 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 Soktas Tekstil 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 Soktas Tekstil Sanayi, you can compare the effects of market volatilities on Hektas Ticaret and Soktas Tekstil 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 Soktas Tekstil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hektas Ticaret and Soktas Tekstil.

Diversification Opportunities for Hektas Ticaret and Soktas Tekstil

-0.13

Correlation Coefficient

Hektas Ticaret  Soktas Tekstil

Good diversification

The 3 months correlation between Hektas and Soktas is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hektas Ticaret TAS and Soktas Tekstil Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soktas Tekstil Sanayi 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 Soktas Tekstil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soktas Tekstil Sanayi has no effect on the direction of Hektas Ticaret i.e., Hektas Ticaret and Soktas Tekstil go up and down completely randomly.

Pair Corralation between Hektas Ticaret and Soktas Tekstil

Assuming the 90 days trading horizon Hektas Ticaret TAS is expected to under-perform the Soktas Tekstil. In addition to that, Hektas Ticaret is 2.02 times more volatile than Soktas Tekstil Sanayi. It trades about -0.01 of its total potential returns per unit of risk. Soktas Tekstil Sanayi is currently generating about 0.01 per unit of volatility. If you would invest  517.00  in Soktas Tekstil Sanayi on September 23, 2024 and sell it today you would lose (52.00) from holding Soktas Tekstil Sanayi or give up 10.06% of portfolio value over 90 days.

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

Hektas Ticaret TAS  vs.  Soktas Tekstil Sanayi

Hektas Ticaret TAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hektas Ticaret TAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Soktas Tekstil Sanayi

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Soktas Tekstil Sanayi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Soktas Tekstil 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 Soktas Tekstil

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

The idea behind Hektas Ticaret TAS and Soktas Tekstil Sanayi 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.