Correlation Between Kartonsan Karton and Otokar Otomotiv

Can any of the company-specific risk be diversified away by investing in both Kartonsan Karton and Otokar Otomotiv 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 Kartonsan Karton and Otokar Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kartonsan Karton Sanayi and Otokar Otomotiv ve, you can compare the effects of market volatilities on Kartonsan Karton and Otokar Otomotiv 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 Kartonsan Karton with a short position of Otokar Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kartonsan Karton and Otokar Otomotiv.

Diversification Opportunities for Kartonsan Karton and Otokar Otomotiv

0.42

Correlation Coefficient

Kartonsan Karton  Otokar Otomotiv

Very weak diversification

The 3 months correlation between Kartonsan and Otokar is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kartonsan Karton Sanayi and Otokar Otomotiv ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otokar Otomotiv ve and Kartonsan Karton 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 Kartonsan Karton Sanayi are associated (or correlated) with Otokar Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otokar Otomotiv ve has no effect on the direction of Kartonsan Karton i.e., Kartonsan Karton and Otokar Otomotiv go up and down completely randomly.

Pair Corralation between Kartonsan Karton and Otokar Otomotiv

Assuming the 90 days trading horizon Kartonsan Karton Sanayi is expected to generate 1.46 times more return on investment than Otokar Otomotiv. However, Kartonsan Karton is 1.46 times more volatile than Otokar Otomotiv ve. It trades about 0.22 of its potential returns per unit of risk. Otokar Otomotiv ve is currently generating about 0.19 per unit of risk. If you would invest  8,600  in Kartonsan Karton Sanayi on September 15, 2024 and sell it today you would earn a total of  920.00  from holding Kartonsan Karton Sanayi or generate 10.7% return on investment over 90 days.

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

Kartonsan Karton Sanayi  vs.  Otokar Otomotiv ve

Kartonsan Karton Sanayi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kartonsan Karton Sanayi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kartonsan Karton may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Otokar Otomotiv ve

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Otokar Otomotiv ve are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Otokar Otomotiv may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kartonsan Karton and Otokar Otomotiv

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

The idea behind Kartonsan Karton Sanayi and Otokar Otomotiv 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.