Correlation Between Koza Altin and SASA Polyester

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

By analyzing existing cross correlation between Koza Altin Isletmeleri and SASA Polyester Sanayi, you can compare the effects of market volatilities on Koza Altin and SASA Polyester 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 Altin with a short position of SASA Polyester. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koza Altin and SASA Polyester.

Diversification Opportunities for Koza Altin and SASA Polyester

0.85

Correlation Coefficient

Koza Altin  SASA Polyester

Very poor diversification

The 3 months correlation between Koza and SASA is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Koza Altin Isletmeleri and SASA Polyester Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SASA Polyester Sanayi and Koza Altin 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 Altin Isletmeleri are associated (or correlated) with SASA Polyester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SASA Polyester Sanayi has no effect on the direction of Koza Altin i.e., Koza Altin and SASA Polyester go up and down completely randomly.

Pair Corralation between Koza Altin and SASA Polyester

Assuming the 90 days trading horizon Koza Altin Isletmeleri is expected to generate 0.96 times more return on investment than SASA Polyester. However, Koza Altin Isletmeleri is 1.04 times less risky than SASA Polyester. It trades about -0.04 of its potential returns per unit of risk. SASA Polyester Sanayi is currently generating about -0.21 per unit of risk. If you would invest  2,332  in Koza Altin Isletmeleri on October 14, 2024 and sell it today you would lose (42.00) from holding Koza Altin Isletmeleri or give up 1.8% of portfolio value over 90 days.

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

Koza Altin Isletmeleri  vs.  SASA Polyester Sanayi

Koza Altin Isletmeleri

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Koza Altin Isletmeleri are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Koza Altin demonstrated solid returns over the last few months and may actually be approaching a breakup point.

SASA Polyester Sanayi

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SASA Polyester Sanayi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SASA Polyester 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 Altin and SASA Polyester

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

The idea behind Koza Altin Isletmeleri and SASA Polyester Sanayi 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.