Correlation Between Koc Holding and Biotrend Cevre

Can any of the company-specific risk be diversified away by investing in both Koc Holding and Biotrend Cevre 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 Koc Holding and Biotrend Cevre into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koc Holding AS and Biotrend Cevre ve, you can compare the effects of market volatilities on Koc Holding and Biotrend Cevre 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 Koc Holding with a short position of Biotrend Cevre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koc Holding and Biotrend Cevre.

Diversification Opportunities for Koc Holding and Biotrend Cevre

-0.33

Correlation Coefficient

Koc Holding  Biotrend Cevre

Very good diversification

The 3 months correlation between Koc and Biotrend is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Biotrend Cevre ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotrend Cevre ve and Koc Holding 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 Koc Holding AS are associated (or correlated) with Biotrend Cevre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotrend Cevre ve has no effect on the direction of Koc Holding i.e., Koc Holding and Biotrend Cevre go up and down completely randomly.

Pair Corralation between Koc Holding and Biotrend Cevre

Assuming the 90 days trading horizon Koc Holding AS is expected to under-perform the Biotrend Cevre. But the stock apears to be less risky and, when comparing its historical volatility, Koc Holding AS is 1.31 times less risky than Biotrend Cevre. The stock trades about -0.21 of its potential returns per unit of risk. The Biotrend Cevre ve is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,807  in Biotrend Cevre ve on September 23, 2024 and sell it today you would lose (22.00) from holding Biotrend Cevre ve or give up 1.22% of portfolio value over 90 days.

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

Koc Holding AS  vs.  Biotrend Cevre ve

Koc Holding AS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Biotrend Cevre ve

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Biotrend Cevre ve are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Biotrend Cevre is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Koc Holding and Biotrend Cevre

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

The idea behind Koc Holding AS and Biotrend Cevre 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.