Correlation Between Koc Holding and Turkiye Halk

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

Diversification Opportunities for Koc Holding and Turkiye Halk

-0.82

Correlation Coefficient

Koc Holding  Turkiye Halk

Pay attention - limited upside

The 3 months correlation between Koc and Turkiye is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Turkiye Halk Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Halk Bankasi 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 Turkiye Halk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Halk Bankasi has no effect on the direction of Koc Holding i.e., Koc Holding and Turkiye Halk go up and down completely randomly.

Pair Corralation between Koc Holding and Turkiye Halk

Assuming the 90 days trading horizon Koc Holding AS is expected to under-perform the Turkiye Halk. But the stock apears to be less risky and, when comparing its historical volatility, Koc Holding AS is 1.49 times less risky than Turkiye Halk. The stock trades about -0.17 of its potential returns per unit of risk. The Turkiye Halk Bankasi is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,943  in Turkiye Halk Bankasi on December 4, 2024 and sell it today you would earn a total of  77.00  from holding Turkiye Halk Bankasi or generate 3.96% return on investment over 90 days.

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

Koc Holding AS  vs.  Turkiye Halk Bankasi

Koc Holding AS

Risk-Adjusted Performance

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 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.

Turkiye Halk Bankasi

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Halk Bankasi are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkiye Halk demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Koc Holding and Turkiye Halk

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

The idea behind Koc Holding AS and Turkiye Halk Bankasi 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..