Correlation Between Iskenderun Demir and Borusan Yatirim

Can any of the company-specific risk be diversified away by investing in both Iskenderun Demir and Borusan Yatirim 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 Iskenderun Demir and Borusan Yatirim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iskenderun Demir ve and Borusan Yatirim ve, you can compare the effects of market volatilities on Iskenderun Demir and Borusan Yatirim 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 Iskenderun Demir with a short position of Borusan Yatirim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iskenderun Demir and Borusan Yatirim.

Diversification Opportunities for Iskenderun Demir and Borusan Yatirim

0.74

Correlation Coefficient

Iskenderun Demir  Borusan Yatirim

Poor diversification

The 3 months correlation between Iskenderun and Borusan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Iskenderun Demir ve and Borusan Yatirim ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borusan Yatirim ve and Iskenderun Demir 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 Iskenderun Demir ve are associated (or correlated) with Borusan Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borusan Yatirim ve has no effect on the direction of Iskenderun Demir i.e., Iskenderun Demir and Borusan Yatirim go up and down completely randomly.

Pair Corralation between Iskenderun Demir and Borusan Yatirim

Assuming the 90 days trading horizon Iskenderun Demir ve is expected to under-perform the Borusan Yatirim. But the stock apears to be less risky and, when comparing its historical volatility, Iskenderun Demir ve is 1.01 times less risky than Borusan Yatirim. The stock trades about -0.07 of its potential returns per unit of risk. The Borusan Yatirim ve is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  205,500  in Borusan Yatirim ve on December 30, 2024 and sell it today you would lose (12,400) from holding Borusan Yatirim ve or give up 6.03% of portfolio value over 90 days.

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

Iskenderun Demir ve  vs.  Borusan Yatirim ve

Iskenderun Demir

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iskenderun Demir ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Borusan Yatirim ve

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Iskenderun Demir and Borusan Yatirim

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

The idea behind Iskenderun Demir ve and Borusan Yatirim ve 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.