Correlation Between KOC METALURJI and MMC Sanayi

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

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

Diversification Opportunities for KOC METALURJI and MMC Sanayi

-0.24

Correlation Coefficient

KOC METALURJI  MMC Sanayi

Very good diversification

The 3 months correlation between KOC and MMC is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding KOC METALURJI and MMC Sanayi ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MMC Sanayi ve 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 MMC Sanayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MMC Sanayi ve has no effect on the direction of KOC METALURJI i.e., KOC METALURJI and MMC Sanayi go up and down completely randomly.

Pair Corralation between KOC METALURJI and MMC Sanayi

Assuming the 90 days trading horizon KOC METALURJI is expected to under-perform the MMC Sanayi. In addition to that, KOC METALURJI is 1.48 times more volatile than MMC Sanayi ve. It trades about -0.07 of its total potential returns per unit of risk. MMC Sanayi ve is currently generating about 0.26 per unit of volatility. If you would invest  2,016  in MMC Sanayi ve on October 10, 2024 and sell it today you would earn a total of  200.00  from holding MMC Sanayi ve or generate 9.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

KOC METALURJI  vs.  MMC Sanayi ve

KOC METALURJI

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KOC METALURJI are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, KOC METALURJI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

MMC Sanayi ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MMC Sanayi ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with KOC METALURJI and MMC Sanayi

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

The idea behind KOC METALURJI and MMC Sanayi ve 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.