Correlation Between Lokman Hekim and Migros Ticaret

Can any of the company-specific risk be diversified away by investing in both Lokman Hekim and Migros Ticaret 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 Lokman Hekim and Migros Ticaret into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lokman Hekim Engurusag and Migros Ticaret AS, you can compare the effects of market volatilities on Lokman Hekim and Migros Ticaret 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 Lokman Hekim with a short position of Migros Ticaret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lokman Hekim and Migros Ticaret.

Diversification Opportunities for Lokman Hekim and Migros Ticaret

0.86

Correlation Coefficient

Lokman Hekim  Migros Ticaret

Very poor diversification

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

Pair Corralation between Lokman Hekim and Migros Ticaret

Assuming the 90 days trading horizon Lokman Hekim is expected to generate 1.23 times less return on investment than Migros Ticaret. But when comparing it to its historical volatility, Lokman Hekim Engurusag is 1.01 times less risky than Migros Ticaret. It trades about 0.15 of its potential returns per unit of risk. Migros Ticaret AS is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  42,627  in Migros Ticaret AS on October 11, 2024 and sell it today you would earn a total of  10,523  from holding Migros Ticaret AS or generate 24.69% return on investment over 90 days.

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

Lokman Hekim Engurusag  vs.  Migros Ticaret AS

Lokman Hekim Engurusag

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lokman Hekim Engurusag are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Lokman Hekim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Migros Ticaret AS

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Migros Ticaret AS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Migros Ticaret demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lokman Hekim and Migros Ticaret

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

The idea behind Lokman Hekim Engurusag and Migros Ticaret 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.