Correlation Between Koc Holdings and Akbank Turk

Can any of the company-specific risk be diversified away by investing in both Koc Holdings and Akbank Turk 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 Holdings and Akbank Turk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koc Holdings AS and Akbank Turk Anonim, you can compare the effects of market volatilities on Koc Holdings and Akbank Turk 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 Holdings with a short position of Akbank Turk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koc Holdings and Akbank Turk.

Diversification Opportunities for Koc Holdings and Akbank Turk

0.02

Correlation Coefficient

Koc Holdings  Akbank Turk

Significant diversification

The 3 months correlation between Koc and Akbank is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holdings AS and Akbank Turk Anonim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank Turk Anonim and Koc Holdings 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 Holdings AS are associated (or correlated) with Akbank Turk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank Turk Anonim has no effect on the direction of Koc Holdings i.e., Koc Holdings and Akbank Turk go up and down completely randomly.

Pair Corralation between Koc Holdings and Akbank Turk

Assuming the 90 days horizon Koc Holdings AS is expected to under-perform the Akbank Turk. But the pink sheet apears to be less risky and, when comparing its historical volatility, Koc Holdings AS is 1.46 times less risky than Akbank Turk. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Akbank Turk Anonim is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  359.00  in Akbank Turk Anonim on December 3, 2024 and sell it today you would earn a total of  10.00  from holding Akbank Turk Anonim or generate 2.79% return on investment over 90 days.

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

Koc Holdings AS  vs.  Akbank Turk Anonim

Koc Holdings AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koc Holdings AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Akbank Turk Anonim

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank Turk Anonim are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Akbank Turk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Koc Holdings and Akbank Turk

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

The idea behind Koc Holdings AS and Akbank Turk Anonim 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.