Correlation Between Lokman Hekim and Vakif Finansal

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

Diversification Opportunities for Lokman Hekim and Vakif Finansal

0.67

Correlation Coefficient

Lokman Hekim  Vakif Finansal

Poor diversification

The 3 months correlation between Lokman and Vakif is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lokman Hekim Engurusag and Vakif Finansal Kiralama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vakif Finansal Kiralama 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 Vakif Finansal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vakif Finansal Kiralama has no effect on the direction of Lokman Hekim i.e., Lokman Hekim and Vakif Finansal go up and down completely randomly.

Pair Corralation between Lokman Hekim and Vakif Finansal

Assuming the 90 days trading horizon Lokman Hekim is expected to generate 1.74 times less return on investment than Vakif Finansal. But when comparing it to its historical volatility, Lokman Hekim Engurusag is 2.11 times less risky than Vakif Finansal. It trades about 0.27 of its potential returns per unit of risk. Vakif Finansal Kiralama is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  146.00  in Vakif Finansal Kiralama on September 23, 2024 and sell it today you would earn a total of  48.00  from holding Vakif Finansal Kiralama or generate 32.88% return on investment over 90 days.

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

Lokman Hekim Engurusag  vs.  Vakif Finansal Kiralama

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.

Vakif Finansal Kiralama

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vakif Finansal Kiralama are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Vakif Finansal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lokman Hekim and Vakif Finansal

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

The idea behind Lokman Hekim Engurusag and Vakif Finansal Kiralama 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.