Correlation Between Koza Anadolu and Euro Menkul

Can any of the company-specific risk be diversified away by investing in both Koza Anadolu and Euro Menkul 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 Euro Menkul 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 Euro Menkul Kiymet, you can compare the effects of market volatilities on Koza Anadolu and Euro Menkul 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 Euro Menkul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koza Anadolu and Euro Menkul.

Diversification Opportunities for Koza Anadolu and Euro Menkul

0.21

Correlation Coefficient

Koza Anadolu  Euro Menkul

Modest diversification

The 3 months correlation between Koza and Euro is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Koza Anadolu Metal and Euro Menkul Kiymet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Menkul Kiymet 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 Euro Menkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Menkul Kiymet has no effect on the direction of Koza Anadolu i.e., Koza Anadolu and Euro Menkul go up and down completely randomly.

Pair Corralation between Koza Anadolu and Euro Menkul

Assuming the 90 days trading horizon Koza Anadolu Metal is expected to generate 1.16 times more return on investment than Euro Menkul. However, Koza Anadolu is 1.16 times more volatile than Euro Menkul Kiymet. It trades about 0.03 of its potential returns per unit of risk. Euro Menkul Kiymet is currently generating about -0.02 per unit of risk. If you would invest  6,785  in Koza Anadolu Metal on September 15, 2024 and sell it today you would earn a total of  265.00  from holding Koza Anadolu Metal or generate 3.91% 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.  Euro Menkul Kiymet

Koza Anadolu Metal

Risk-Adjusted Performance

2 of 100

Weak

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

Euro Menkul Kiymet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Euro Menkul Kiymet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Euro Menkul is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Koza Anadolu and Euro Menkul

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

The idea behind Koza Anadolu Metal and Euro Menkul Kiymet 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 Global Correlations module to find global opportunities by holding instruments from different markets.