Correlation Between Kocaer Celik and Burcelik Bursa

Can any of the company-specific risk be diversified away by investing in both Kocaer Celik and Burcelik Bursa 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 Kocaer Celik and Burcelik Bursa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kocaer Celik Sanayi and Burcelik Bursa Celik, you can compare the effects of market volatilities on Kocaer Celik and Burcelik Bursa 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 Kocaer Celik with a short position of Burcelik Bursa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kocaer Celik and Burcelik Bursa.

Diversification Opportunities for Kocaer Celik and Burcelik Bursa

-0.77

Correlation Coefficient

Kocaer Celik  Burcelik Bursa

Pay attention - limited upside

The 3 months correlation between Kocaer and Burcelik is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kocaer Celik Sanayi and Burcelik Bursa Celik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burcelik Bursa Celik and Kocaer Celik 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 Kocaer Celik Sanayi are associated (or correlated) with Burcelik Bursa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burcelik Bursa Celik has no effect on the direction of Kocaer Celik i.e., Kocaer Celik and Burcelik Bursa go up and down completely randomly.

Pair Corralation between Kocaer Celik and Burcelik Bursa

Assuming the 90 days trading horizon Kocaer Celik Sanayi is expected to under-perform the Burcelik Bursa. But the stock apears to be less risky and, when comparing its historical volatility, Kocaer Celik Sanayi is 1.35 times less risky than Burcelik Bursa. The stock trades about -0.09 of its potential returns per unit of risk. The Burcelik Bursa Celik is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,382  in Burcelik Bursa Celik on September 26, 2024 and sell it today you would lose (449.00) from holding Burcelik Bursa Celik or give up 18.85% of portfolio value over 90 days.

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

Kocaer Celik Sanayi  vs.  Burcelik Bursa Celik

Kocaer Celik Sanayi

Risk-Adjusted Performance

2 of 100

Insignificant

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

Burcelik Bursa Celik

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kocaer Celik and Burcelik Bursa

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

The idea behind Kocaer Celik Sanayi and Burcelik Bursa Celik 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.