Correlation Between Koza Anadolu and Vakif Menkul

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

Diversification Opportunities for Koza Anadolu and Vakif Menkul

0.7

Correlation Coefficient

Koza Anadolu  Vakif Menkul

Poor diversification

The 3 months correlation between Koza and Vakif is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Koza Anadolu Metal and Vakif Menkul Kiymet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vakif 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 Vakif Menkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vakif Menkul Kiymet has no effect on the direction of Koza Anadolu i.e., Koza Anadolu and Vakif Menkul go up and down completely randomly.

Pair Corralation between Koza Anadolu and Vakif Menkul

Assuming the 90 days trading horizon Koza Anadolu Metal is expected to generate 1.1 times more return on investment than Vakif Menkul. However, Koza Anadolu is 1.1 times more volatile than Vakif Menkul Kiymet. It trades about 0.2 of its potential returns per unit of risk. Vakif Menkul Kiymet is currently generating about 0.01 per unit of risk. If you would invest  5,705  in Koza Anadolu Metal on October 6, 2024 and sell it today you would earn a total of  1,390  from holding Koza Anadolu Metal or generate 24.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.73%
Values	Daily Returns

Koza Anadolu Metal  vs.  Vakif Menkul Kiymet

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 weak forward indicators, Koza Anadolu demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Vakif Menkul Kiymet

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vakif Menkul Kiymet are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Vakif Menkul is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Koza Anadolu and Vakif Menkul

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

The idea behind Koza Anadolu Metal and Vakif 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.