Correlation Between Kent Gida and Yesil Yapi

Can any of the company-specific risk be diversified away by investing in both Kent Gida and Yesil Yapi 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 Kent Gida and Yesil Yapi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kent Gida Maddeleri and Yesil Yapi Endustrisi, you can compare the effects of market volatilities on Kent Gida and Yesil Yapi 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 Kent Gida with a short position of Yesil Yapi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kent Gida and Yesil Yapi.

Diversification Opportunities for Kent Gida and Yesil Yapi

0.63

Correlation Coefficient

Kent Gida  Yesil Yapi

Poor diversification

The 3 months correlation between Kent and Yesil is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kent Gida Maddeleri and Yesil Yapi Endustrisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yesil Yapi Endustrisi and Kent Gida 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 Kent Gida Maddeleri are associated (or correlated) with Yesil Yapi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yesil Yapi Endustrisi has no effect on the direction of Kent Gida i.e., Kent Gida and Yesil Yapi go up and down completely randomly.

Pair Corralation between Kent Gida and Yesil Yapi

Assuming the 90 days trading horizon Kent Gida Maddeleri is expected to generate 0.83 times more return on investment than Yesil Yapi. However, Kent Gida Maddeleri is 1.21 times less risky than Yesil Yapi. It trades about -0.07 of its potential returns per unit of risk. Yesil Yapi Endustrisi is currently generating about -0.22 per unit of risk. If you would invest  104,400  in Kent Gida Maddeleri on December 21, 2024 and sell it today you would lose (15,300) from holding Kent Gida Maddeleri or give up 14.66% of portfolio value over 90 days.

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

Kent Gida Maddeleri  vs.  Yesil Yapi Endustrisi

Kent Gida Maddeleri

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kent Gida Maddeleri has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Yesil Yapi Endustrisi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yesil Yapi Endustrisi 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.

Pair Trading with Kent Gida and Yesil Yapi

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

The idea behind Kent Gida Maddeleri and Yesil Yapi Endustrisi 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.