Correlation Between Kocaer Celik and Dogan Sirketler

Can any of the company-specific risk be diversified away by investing in both Kocaer Celik and Dogan Sirketler 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 Dogan Sirketler 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 Dogan Sirketler Grubu, you can compare the effects of market volatilities on Kocaer Celik and Dogan Sirketler 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 Dogan Sirketler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kocaer Celik and Dogan Sirketler.

Diversification Opportunities for Kocaer Celik and Dogan Sirketler

0.64

Correlation Coefficient

Kocaer Celik  Dogan Sirketler

Poor diversification

The 3 months correlation between Kocaer and Dogan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kocaer Celik Sanayi and Dogan Sirketler Grubu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dogan Sirketler Grubu 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 Dogan Sirketler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dogan Sirketler Grubu has no effect on the direction of Kocaer Celik i.e., Kocaer Celik and Dogan Sirketler go up and down completely randomly.

Pair Corralation between Kocaer Celik and Dogan Sirketler

Assuming the 90 days trading horizon Kocaer Celik Sanayi is expected to under-perform the Dogan Sirketler. In addition to that, Kocaer Celik is 1.19 times more volatile than Dogan Sirketler Grubu. It trades about -0.05 of its total potential returns per unit of risk. Dogan Sirketler Grubu is currently generating about 0.04 per unit of volatility. If you would invest  1,467  in Dogan Sirketler Grubu on December 28, 2024 and sell it today you would earn a total of  59.00  from holding Dogan Sirketler Grubu or generate 4.02% return on investment over 90 days.

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

Kocaer Celik Sanayi  vs.  Dogan Sirketler Grubu

Kocaer Celik Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kocaer Celik Sanayi 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.

Dogan Sirketler Grubu

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dogan Sirketler Grubu are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Dogan Sirketler 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 Dogan Sirketler

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

The idea behind Kocaer Celik Sanayi and Dogan Sirketler Grubu 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.