Correlation Between KOC METALURJI and Borlease Otomotiv

Can any of the company-specific risk be diversified away by investing in both KOC METALURJI and Borlease Otomotiv 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 METALURJI and Borlease Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KOC METALURJI and Borlease Otomotiv AS, you can compare the effects of market volatilities on KOC METALURJI and Borlease Otomotiv 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 METALURJI with a short position of Borlease Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOC METALURJI and Borlease Otomotiv.

Diversification Opportunities for KOC METALURJI and Borlease Otomotiv

-0.51

Correlation Coefficient

KOC METALURJI  Borlease Otomotiv

Excellent diversification

The 3 months correlation between KOC and Borlease is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding KOC METALURJI and Borlease Otomotiv AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borlease Otomotiv and KOC METALURJI 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 METALURJI are associated (or correlated) with Borlease Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borlease Otomotiv has no effect on the direction of KOC METALURJI i.e., KOC METALURJI and Borlease Otomotiv go up and down completely randomly.

Pair Corralation between KOC METALURJI and Borlease Otomotiv

Assuming the 90 days trading horizon KOC METALURJI is expected to under-perform the Borlease Otomotiv. In addition to that, KOC METALURJI is 1.29 times more volatile than Borlease Otomotiv AS. It trades about -0.16 of its total potential returns per unit of risk. Borlease Otomotiv AS is currently generating about 0.15 per unit of volatility. If you would invest  6,480  in Borlease Otomotiv AS on December 24, 2024 and sell it today you would earn a total of  1,540  from holding Borlease Otomotiv AS or generate 23.77% return on investment over 90 days.

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

KOC METALURJI  vs.  Borlease Otomotiv AS

KOC METALURJI

Risk-Adjusted Performance

Very Weak

Over the last 90 days KOC METALURJI 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.

Borlease Otomotiv

Risk-Adjusted Performance

Good

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

Pair Trading with KOC METALURJI and Borlease Otomotiv

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

The idea behind KOC METALURJI and Borlease Otomotiv AS 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..