Correlation Between KOC METALURJI and Yesil Yapi

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

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

Diversification Opportunities for KOC METALURJI and Yesil Yapi

0.67

Correlation Coefficient

KOC METALURJI  Yesil Yapi

Poor diversification

The 3 months correlation between KOC and Yesil is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding KOC METALURJI and Yesil Yapi Endustrisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yesil Yapi Endustrisi 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 Yesil Yapi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yesil Yapi Endustrisi has no effect on the direction of KOC METALURJI i.e., KOC METALURJI and Yesil Yapi go up and down completely randomly.

Pair Corralation between KOC METALURJI and Yesil Yapi

Assuming the 90 days trading horizon KOC METALURJI is expected to under-perform the Yesil Yapi. But the stock apears to be less risky and, when comparing its historical volatility, KOC METALURJI is 1.51 times less risky than Yesil Yapi. The stock trades about -0.01 of its potential returns per unit of risk. The Yesil Yapi Endustrisi is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  154.00  in Yesil Yapi Endustrisi on October 24, 2024 and sell it today you would earn a total of  49.00  from holding Yesil Yapi Endustrisi or generate 31.82% 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.  Yesil Yapi Endustrisi

KOC METALURJI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KOC METALURJI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, KOC METALURJI is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Yesil Yapi Endustrisi

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with KOC METALURJI and Yesil Yapi

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

The idea behind KOC METALURJI and Yesil Yapi Endustrisi 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.