Correlation Between Koc Holding and Reysas Gayrimenkul

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

Diversification Opportunities for Koc Holding and Reysas Gayrimenkul

0.79

Correlation Coefficient

Koc Holding  Reysas Gayrimenkul

Poor diversification

The 3 months correlation between Koc and Reysas is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Reysas Gayrimenkul Yatirim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reysas Gayrimenkul 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 Reysas Gayrimenkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reysas Gayrimenkul has no effect on the direction of Koc Holding i.e., Koc Holding and Reysas Gayrimenkul go up and down completely randomly.

Pair Corralation between Koc Holding and Reysas Gayrimenkul

Assuming the 90 days trading horizon Koc Holding is expected to generate 2.5 times less return on investment than Reysas Gayrimenkul. But when comparing it to its historical volatility, Koc Holding AS is 1.6 times less risky than Reysas Gayrimenkul. It trades about 0.09 of its potential returns per unit of risk. Reysas Gayrimenkul Yatirim is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,123  in Reysas Gayrimenkul Yatirim on September 13, 2024 and sell it today you would earn a total of  353.00  from holding Reysas Gayrimenkul Yatirim or generate 31.43% return on investment over 90 days.

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

Koc Holding AS  vs.  Reysas Gayrimenkul Yatirim

Koc Holding AS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Koc Holding AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Koc Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Reysas Gayrimenkul

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Reysas Gayrimenkul Yatirim are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Reysas Gayrimenkul demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Koc Holding and Reysas Gayrimenkul

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

The idea behind Koc Holding AS and Reysas Gayrimenkul Yatirim 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.