Correlation Between KOC METALURJI and Hedef Girisim

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

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

Diversification Opportunities for KOC METALURJI and Hedef Girisim

0.72

Correlation Coefficient

KOC METALURJI  Hedef Girisim

Poor diversification

The 3 months correlation between KOC and Hedef is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding KOC METALURJI and Hedef Girisim Sermayesi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedef Girisim Sermayesi 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 Hedef Girisim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedef Girisim Sermayesi has no effect on the direction of KOC METALURJI i.e., KOC METALURJI and Hedef Girisim go up and down completely randomly.

Pair Corralation between KOC METALURJI and Hedef Girisim

Assuming the 90 days trading horizon KOC METALURJI is expected to under-perform the Hedef Girisim. But the stock apears to be less risky and, when comparing its historical volatility, KOC METALURJI is 1.35 times less risky than Hedef Girisim. The stock trades about -0.04 of its potential returns per unit of risk. The Hedef Girisim Sermayesi is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  178.00  in Hedef Girisim Sermayesi on October 8, 2024 and sell it today you would lose (17.00) from holding Hedef Girisim Sermayesi or give up 9.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	32.32%
Values	Daily Returns

KOC METALURJI  vs.  Hedef Girisim Sermayesi

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.

Hedef Girisim Sermayesi

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hedef Girisim Sermayesi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Hedef Girisim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KOC METALURJI and Hedef Girisim

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

The idea behind KOC METALURJI and Hedef Girisim Sermayesi 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.