Correlation Between MMC Sanayi and Lokman Hekim

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

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

Diversification Opportunities for MMC Sanayi and Lokman Hekim

-0.61

Correlation Coefficient

MMC Sanayi  Lokman Hekim

Excellent diversification

The 3 months correlation between MMC and Lokman is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding MMC Sanayi ve and Lokman Hekim Engurusag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lokman Hekim Engurusag and MMC Sanayi 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 MMC Sanayi ve are associated (or correlated) with Lokman Hekim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lokman Hekim Engurusag has no effect on the direction of MMC Sanayi i.e., MMC Sanayi and Lokman Hekim go up and down completely randomly.

Pair Corralation between MMC Sanayi and Lokman Hekim

Assuming the 90 days trading horizon MMC Sanayi ve is expected to generate 0.91 times more return on investment than Lokman Hekim. However, MMC Sanayi ve is 1.1 times less risky than Lokman Hekim. It trades about 0.2 of its potential returns per unit of risk. Lokman Hekim Engurusag is currently generating about 0.09 per unit of risk. If you would invest  2,016  in MMC Sanayi ve on October 8, 2024 and sell it today you would earn a total of  142.00  from holding MMC Sanayi ve or generate 7.04% return on investment over 90 days.

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

MMC Sanayi ve  vs.  Lokman Hekim Engurusag

MMC Sanayi ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MMC Sanayi ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Lokman Hekim Engurusag

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with MMC Sanayi and Lokman Hekim

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

The idea behind MMC Sanayi ve and Lokman Hekim Engurusag 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.