Correlation Between Konya Cimento and Coca Cola

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

By analyzing existing cross correlation between Konya Cimento Sanayi and Coca Cola Icecek AS, you can compare the effects of market volatilities on Konya Cimento and Coca Cola 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 Konya Cimento with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konya Cimento and Coca Cola.

Diversification Opportunities for Konya Cimento and Coca Cola

0.52

Correlation Coefficient

Konya Cimento  Coca Cola

Very weak diversification

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

Pair Corralation between Konya Cimento and Coca Cola

Assuming the 90 days trading horizon Konya Cimento is expected to generate 4.02 times less return on investment than Coca Cola. In addition to that, Konya Cimento is 1.13 times more volatile than Coca Cola Icecek AS. It trades about 0.07 of its total potential returns per unit of risk. Coca Cola Icecek AS is currently generating about 0.31 per unit of volatility. If you would invest  4,978  in Coca Cola Icecek AS on September 23, 2024 and sell it today you would earn a total of  857.00  from holding Coca Cola Icecek AS or generate 17.22% return on investment over 90 days.

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

Konya Cimento Sanayi  vs.  Coca Cola Icecek AS

Konya Cimento Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Konya Cimento Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Konya Cimento may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Coca Cola Icecek

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Konya Cimento and Coca Cola

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

The idea behind Konya Cimento Sanayi and Coca Cola Icecek 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.