Correlation Between KOC METALURJI and Bursa Cimento

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

By analyzing existing cross correlation between KOC METALURJI and Bursa Cimento Fabrikasi, you can compare the effects of market volatilities on KOC METALURJI and Bursa Cimento 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 Bursa Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOC METALURJI and Bursa Cimento.

Diversification Opportunities for KOC METALURJI and Bursa Cimento

0.69

Correlation Coefficient

KOC METALURJI  Bursa Cimento

Poor diversification

The 3 months correlation between KOC and Bursa is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding KOC METALURJI and Bursa Cimento Fabrikasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bursa Cimento Fabrikasi 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 Bursa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bursa Cimento Fabrikasi has no effect on the direction of KOC METALURJI i.e., KOC METALURJI and Bursa Cimento go up and down completely randomly.

Pair Corralation between KOC METALURJI and Bursa Cimento

Assuming the 90 days trading horizon KOC METALURJI is expected to under-perform the Bursa Cimento. In addition to that, KOC METALURJI is 1.2 times more volatile than Bursa Cimento Fabrikasi. It trades about -0.05 of its total potential returns per unit of risk. Bursa Cimento Fabrikasi is currently generating about 0.1 per unit of volatility. If you would invest  885.00  in Bursa Cimento Fabrikasi on October 8, 2024 and sell it today you would earn a total of  35.00  from holding Bursa Cimento Fabrikasi or generate 3.95% return on investment over 90 days.

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

KOC METALURJI  vs.  Bursa Cimento Fabrikasi

KOC METALURJI

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KOC METALURJI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, KOC METALURJI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bursa Cimento Fabrikasi

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bursa Cimento Fabrikasi are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bursa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KOC METALURJI and Bursa Cimento

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

The idea behind KOC METALURJI and Bursa Cimento Fabrikasi 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.