Correlation Between Kristal Kola and Borlease Otomotiv

Can any of the company-specific risk be diversified away by investing in both Kristal Kola and Borlease Otomotiv 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 Kristal Kola and Borlease Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kristal Kola ve and Borlease Otomotiv AS, you can compare the effects of market volatilities on Kristal Kola and Borlease Otomotiv 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 Kristal Kola with a short position of Borlease Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kristal Kola and Borlease Otomotiv.

Diversification Opportunities for Kristal Kola and Borlease Otomotiv

0.06

Correlation Coefficient

Kristal Kola  Borlease Otomotiv

Significant diversification

The 3 months correlation between Kristal and Borlease is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kristal Kola ve and Borlease Otomotiv AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borlease Otomotiv and Kristal Kola 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 Kristal Kola ve are associated (or correlated) with Borlease Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borlease Otomotiv has no effect on the direction of Kristal Kola i.e., Kristal Kola and Borlease Otomotiv go up and down completely randomly.

Pair Corralation between Kristal Kola and Borlease Otomotiv

Assuming the 90 days trading horizon Kristal Kola ve is expected to under-perform the Borlease Otomotiv. But the stock apears to be less risky and, when comparing its historical volatility, Kristal Kola ve is 1.17 times less risky than Borlease Otomotiv. The stock trades about -0.01 of its potential returns per unit of risk. The Borlease Otomotiv AS is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  4,280  in Borlease Otomotiv AS on October 22, 2024 and sell it today you would earn a total of  2,870  from holding Borlease Otomotiv AS or generate 67.06% return on investment over 90 days.

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

Kristal Kola ve  vs.  Borlease Otomotiv AS

Kristal Kola ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kristal Kola ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Kristal Kola is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Borlease Otomotiv

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Borlease Otomotiv demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kristal Kola and Borlease Otomotiv

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

The idea behind Kristal Kola ve and Borlease Otomotiv AS 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.