Correlation Between Lokman Hekim and Soktas Tekstil

Can any of the company-specific risk be diversified away by investing in both Lokman Hekim and Soktas Tekstil 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 Soktas Tekstil 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 Soktas Tekstil Sanayi, you can compare the effects of market volatilities on Lokman Hekim and Soktas Tekstil 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 Soktas Tekstil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lokman Hekim and Soktas Tekstil.

Diversification Opportunities for Lokman Hekim and Soktas Tekstil

-0.46

Correlation Coefficient

Lokman Hekim  Soktas Tekstil

Very good diversification

The 3 months correlation between Lokman and Soktas is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lokman Hekim Engurusag and Soktas Tekstil Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soktas Tekstil Sanayi 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 Soktas Tekstil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soktas Tekstil Sanayi has no effect on the direction of Lokman Hekim i.e., Lokman Hekim and Soktas Tekstil go up and down completely randomly.

Pair Corralation between Lokman Hekim and Soktas Tekstil

Assuming the 90 days trading horizon Lokman Hekim Engurusag is expected to under-perform the Soktas Tekstil. But the stock apears to be less risky and, when comparing its historical volatility, Lokman Hekim Engurusag is 2.91 times less risky than Soktas Tekstil. The stock trades about -0.09 of its potential returns per unit of risk. The Soktas Tekstil Sanayi is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  466.00  in Soktas Tekstil Sanayi on September 23, 2024 and sell it today you would lose (1.00) from holding Soktas Tekstil Sanayi or give up 0.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lokman Hekim Engurusag  vs.  Soktas Tekstil Sanayi

Lokman Hekim Engurusag

Risk-Adjusted Performance

0 of 100

Very Weak

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

Soktas Tekstil Sanayi

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Lokman Hekim and Soktas Tekstil

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

The idea behind Lokman Hekim Engurusag and Soktas Tekstil 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.