Correlation Between Koc Holding and MEGA METAL

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

Diversification Opportunities for Koc Holding and MEGA METAL

0.16

Correlation Coefficient

Koc Holding  MEGA METAL

Average diversification

The 3 months correlation between Koc and MEGA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and MEGA METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEGA METAL 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 MEGA METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEGA METAL has no effect on the direction of Koc Holding i.e., Koc Holding and MEGA METAL go up and down completely randomly.

Pair Corralation between Koc Holding and MEGA METAL

Assuming the 90 days trading horizon Koc Holding AS is expected to generate 0.78 times more return on investment than MEGA METAL. However, Koc Holding AS is 1.28 times less risky than MEGA METAL. It trades about 0.22 of its potential returns per unit of risk. MEGA METAL is currently generating about 0.1 per unit of risk. If you would invest  18,290  in Koc Holding AS on September 14, 2024 and sell it today you would earn a total of  1,310  from holding Koc Holding AS or generate 7.16% return on investment over 90 days.

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

Koc Holding AS  vs.  MEGA METAL

Koc Holding AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Koc Holding AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Koc Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

MEGA METAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEGA METAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

Pair Trading with Koc Holding and MEGA METAL

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

The idea behind Koc Holding AS and MEGA METAL 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.