Correlation Between Kocaer Celik and Ihlas Holding

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

Diversification Opportunities for Kocaer Celik and Ihlas Holding

0.59

Correlation Coefficient

Kocaer Celik  Ihlas Holding

Very weak diversification

The 3 months correlation between Kocaer and Ihlas is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kocaer Celik Sanayi and Ihlas Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihlas Holding AS 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 Ihlas Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihlas Holding AS has no effect on the direction of Kocaer Celik i.e., Kocaer Celik and Ihlas Holding go up and down completely randomly.

Pair Corralation between Kocaer Celik and Ihlas Holding

Assuming the 90 days trading horizon Kocaer Celik Sanayi is expected to generate 0.57 times more return on investment than Ihlas Holding. However, Kocaer Celik Sanayi is 1.76 times less risky than Ihlas Holding. It trades about -0.05 of its potential returns per unit of risk. Ihlas Holding AS is currently generating about -0.08 per unit of risk. If you would invest  1,384  in Kocaer Celik Sanayi on December 28, 2024 and sell it today you would lose (144.00) from holding Kocaer Celik Sanayi or give up 10.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Kocaer Celik Sanayi  vs.  Ihlas Holding AS

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.

Ihlas Holding AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ihlas Holding AS 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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Kocaer Celik and Ihlas Holding

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

The idea behind Kocaer Celik Sanayi and Ihlas Holding AS 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.