Correlation Between Koc Holding and Haci Omer

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

Diversification Opportunities for Koc Holding and Haci Omer

0.4

Correlation Coefficient

Koc Holding  Haci Omer

Very weak diversification

The 3 months correlation between Koc and Haci is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Haci Omer Sabanci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haci Omer Sabanci 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 Haci Omer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haci Omer Sabanci has no effect on the direction of Koc Holding i.e., Koc Holding and Haci Omer go up and down completely randomly.

Pair Corralation between Koc Holding and Haci Omer

Assuming the 90 days trading horizon Koc Holding AS is expected to generate 0.91 times more return on investment than Haci Omer. However, Koc Holding AS is 1.09 times less risky than Haci Omer. It trades about -0.04 of its potential returns per unit of risk. Haci Omer Sabanci is currently generating about -0.07 per unit of risk. If you would invest  18,040  in Koc Holding AS on December 30, 2024 and sell it today you would lose (1,680) from holding Koc Holding AS or give up 9.31% of portfolio value over 90 days.

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

Koc Holding AS  vs.  Haci Omer Sabanci

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 latest inconsistent 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.

Haci Omer Sabanci

Risk-Adjusted Performance

Very Weak

Over the last 90 days Haci Omer Sabanci has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent 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 Haci Omer

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

The idea behind Koc Holding AS and Haci Omer Sabanci 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.