Correlation Between Koza Anadolu and Akbank TAS

Can any of the company-specific risk be diversified away by investing in both Koza Anadolu and Akbank TAS 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 Koza Anadolu and Akbank TAS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koza Anadolu Metal and Akbank TAS, you can compare the effects of market volatilities on Koza Anadolu and Akbank TAS 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 Koza Anadolu with a short position of Akbank TAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koza Anadolu and Akbank TAS.

Diversification Opportunities for Koza Anadolu and Akbank TAS

0.37

Correlation Coefficient

Koza Anadolu  Akbank TAS

Weak diversification

The 3 months correlation between Koza and Akbank is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Koza Anadolu Metal and Akbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank TAS and Koza Anadolu 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 Koza Anadolu Metal are associated (or correlated) with Akbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank TAS has no effect on the direction of Koza Anadolu i.e., Koza Anadolu and Akbank TAS go up and down completely randomly.

Pair Corralation between Koza Anadolu and Akbank TAS

Assuming the 90 days trading horizon Koza Anadolu is expected to generate 1.96 times less return on investment than Akbank TAS. In addition to that, Koza Anadolu is 1.02 times more volatile than Akbank TAS. It trades about 0.05 of its total potential returns per unit of risk. Akbank TAS is currently generating about 0.09 per unit of volatility. If you would invest  3,925  in Akbank TAS on December 2, 2024 and sell it today you would earn a total of  2,805  from holding Akbank TAS or generate 71.46% return on investment over 90 days.

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

Koza Anadolu Metal  vs.  Akbank TAS

Koza Anadolu Metal

Risk-Adjusted Performance

Very Weak

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

Akbank TAS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank TAS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Akbank TAS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Koza Anadolu and Akbank TAS

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

The idea behind Koza Anadolu Metal and Akbank TAS 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.