Correlation Between Koc Holding and Creditwest Faktoring

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

Diversification Opportunities for Koc Holding and Creditwest Faktoring

0.67

Correlation Coefficient

Koc Holding  Creditwest Faktoring

Poor diversification

The 3 months correlation between Koc and Creditwest is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Creditwest Faktoring AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creditwest Faktoring 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 Creditwest Faktoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creditwest Faktoring has no effect on the direction of Koc Holding i.e., Koc Holding and Creditwest Faktoring go up and down completely randomly.

Pair Corralation between Koc Holding and Creditwest Faktoring

Assuming the 90 days trading horizon Koc Holding is expected to generate 1.03 times less return on investment than Creditwest Faktoring. But when comparing it to its historical volatility, Koc Holding AS is 1.63 times less risky than Creditwest Faktoring. It trades about 0.08 of its potential returns per unit of risk. Creditwest Faktoring AS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  314.00  in Creditwest Faktoring AS on October 20, 2024 and sell it today you would earn a total of  291.00  from holding Creditwest Faktoring AS or generate 92.68% return on investment over 90 days.

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

Koc Holding AS  vs.  Creditwest Faktoring AS

Koc Holding AS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Koc Holding AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Creditwest Faktoring

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Koc Holding and Creditwest Faktoring

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

The idea behind Koc Holding AS and Creditwest Faktoring 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.