Correlation Between Kontrolmatik Teknoloji and Ihlas Holding

Can any of the company-specific risk be diversified away by investing in both Kontrolmatik Teknoloji and Ihlas Holding 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 Kontrolmatik Teknoloji and Ihlas Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kontrolmatik Teknoloji Enerji and Ihlas Holding AS, you can compare the effects of market volatilities on Kontrolmatik Teknoloji and Ihlas Holding 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 Kontrolmatik Teknoloji with a short position of Ihlas Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontrolmatik Teknoloji and Ihlas Holding.

Diversification Opportunities for Kontrolmatik Teknoloji and Ihlas Holding

0.52

Correlation Coefficient

Kontrolmatik Teknoloji  Ihlas Holding

Very weak diversification

The 3 months correlation between Kontrolmatik and Ihlas is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kontrolmatik Teknoloji Enerji and Ihlas Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihlas Holding AS and Kontrolmatik Teknoloji 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 Kontrolmatik Teknoloji Enerji are associated (or correlated) with Ihlas Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihlas Holding AS has no effect on the direction of Kontrolmatik Teknoloji i.e., Kontrolmatik Teknoloji and Ihlas Holding go up and down completely randomly.

Pair Corralation between Kontrolmatik Teknoloji and Ihlas Holding

Assuming the 90 days trading horizon Kontrolmatik Teknoloji is expected to generate 1.11 times less return on investment than Ihlas Holding. In addition to that, Kontrolmatik Teknoloji is 2.63 times more volatile than Ihlas Holding AS. It trades about 0.03 of its total potential returns per unit of risk. Ihlas Holding AS is currently generating about 0.08 per unit of volatility. If you would invest  111.00  in Ihlas Holding AS on September 23, 2024 and sell it today you would earn a total of  231.00  from holding Ihlas Holding AS or generate 208.11% return on investment over 90 days.

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

Kontrolmatik Teknoloji Enerji  vs.  Ihlas Holding AS

Kontrolmatik Teknoloji

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kontrolmatik Teknoloji Enerji 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.

Ihlas Holding AS

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ihlas Holding AS are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Ihlas Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kontrolmatik Teknoloji and Ihlas Holding

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

The idea behind Kontrolmatik Teknoloji Enerji and Ihlas Holding 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .