Correlation Between Kardemir Karabuk and Dogan Sirketler

Can any of the company-specific risk be diversified away by investing in both Kardemir Karabuk and Dogan Sirketler 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 Kardemir Karabuk and Dogan Sirketler into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kardemir Karabuk Demir and Dogan Sirketler Grubu, you can compare the effects of market volatilities on Kardemir Karabuk and Dogan Sirketler 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 Kardemir Karabuk with a short position of Dogan Sirketler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardemir Karabuk and Dogan Sirketler.

Diversification Opportunities for Kardemir Karabuk and Dogan Sirketler

0.86

Correlation Coefficient

Kardemir Karabuk  Dogan Sirketler

Very poor diversification

The 3 months correlation between Kardemir and Dogan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kardemir Karabuk Demir and Dogan Sirketler Grubu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dogan Sirketler Grubu and Kardemir Karabuk 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 Kardemir Karabuk Demir are associated (or correlated) with Dogan Sirketler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dogan Sirketler Grubu has no effect on the direction of Kardemir Karabuk i.e., Kardemir Karabuk and Dogan Sirketler go up and down completely randomly.

Pair Corralation between Kardemir Karabuk and Dogan Sirketler

Assuming the 90 days trading horizon Kardemir Karabuk Demir is expected to under-perform the Dogan Sirketler. In addition to that, Kardemir Karabuk is 1.32 times more volatile than Dogan Sirketler Grubu. It trades about -0.08 of its total potential returns per unit of risk. Dogan Sirketler Grubu is currently generating about -0.03 per unit of volatility. If you would invest  1,489  in Dogan Sirketler Grubu on October 12, 2024 and sell it today you would lose (19.00) from holding Dogan Sirketler Grubu or give up 1.28% of portfolio value over 90 days.

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

Kardemir Karabuk Demir  vs.  Dogan Sirketler Grubu

Kardemir Karabuk Demir

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kardemir Karabuk Demir are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Kardemir Karabuk is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Dogan Sirketler Grubu

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with Kardemir Karabuk and Dogan Sirketler

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

The idea behind Kardemir Karabuk Demir and Dogan Sirketler Grubu 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.