Correlation Between Koza Anadolu and Oyak Cimento

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

Diversification Opportunities for Koza Anadolu and Oyak Cimento

0.77

Correlation Coefficient

Koza Anadolu  Oyak Cimento

Poor diversification

The 3 months correlation between Koza and Oyak is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Koza Anadolu Metal and Oyak Cimento Fabrikalari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oyak Cimento Fabrikalari 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 Oyak Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oyak Cimento Fabrikalari has no effect on the direction of Koza Anadolu i.e., Koza Anadolu and Oyak Cimento go up and down completely randomly.

Pair Corralation between Koza Anadolu and Oyak Cimento

Assuming the 90 days trading horizon Koza Anadolu Metal is expected to under-perform the Oyak Cimento. In addition to that, Koza Anadolu is 1.01 times more volatile than Oyak Cimento Fabrikalari. It trades about -0.04 of its total potential returns per unit of risk. Oyak Cimento Fabrikalari is currently generating about 0.32 per unit of volatility. If you would invest  2,052  in Oyak Cimento Fabrikalari on October 12, 2024 and sell it today you would earn a total of  338.00  from holding Oyak Cimento Fabrikalari or generate 16.47% return on investment over 90 days.

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

Koza Anadolu Metal  vs.  Oyak Cimento Fabrikalari

Koza Anadolu Metal

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Koza Anadolu Metal are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Koza Anadolu demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Oyak Cimento Fabrikalari

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oyak Cimento Fabrikalari are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Oyak Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Koza Anadolu and Oyak Cimento

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

The idea behind Koza Anadolu Metal and Oyak Cimento Fabrikalari 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.