Correlation Between Netas Telekomunikasyon and Alkim Kagit

Can any of the company-specific risk be diversified away by investing in both Netas Telekomunikasyon and Alkim Kagit 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 Netas Telekomunikasyon and Alkim Kagit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Netas Telekomunikasyon AS and Alkim Kagit Sanayi, you can compare the effects of market volatilities on Netas Telekomunikasyon and Alkim Kagit 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 Netas Telekomunikasyon with a short position of Alkim Kagit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netas Telekomunikasyon and Alkim Kagit.

Diversification Opportunities for Netas Telekomunikasyon and Alkim Kagit

0.8

Correlation Coefficient

Netas Telekomunikasyon  Alkim Kagit

Very poor diversification

The 3 months correlation between Netas and Alkim is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Netas Telekomunikasyon AS and Alkim Kagit Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Kagit Sanayi and Netas Telekomunikasyon 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 Netas Telekomunikasyon AS are associated (or correlated) with Alkim Kagit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Kagit Sanayi has no effect on the direction of Netas Telekomunikasyon i.e., Netas Telekomunikasyon and Alkim Kagit go up and down completely randomly.

Pair Corralation between Netas Telekomunikasyon and Alkim Kagit

Assuming the 90 days trading horizon Netas Telekomunikasyon AS is expected to under-perform the Alkim Kagit. But the stock apears to be less risky and, when comparing its historical volatility, Netas Telekomunikasyon AS is 1.26 times less risky than Alkim Kagit. The stock trades about -0.14 of its potential returns per unit of risk. The Alkim Kagit Sanayi is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  843.00  in Alkim Kagit Sanayi on December 21, 2024 and sell it today you would lose (187.00) from holding Alkim Kagit Sanayi or give up 22.18% of portfolio value over 90 days.

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

Netas Telekomunikasyon AS  vs.  Alkim Kagit Sanayi

Netas Telekomunikasyon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Netas Telekomunikasyon AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Alkim Kagit Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alkim Kagit Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Netas Telekomunikasyon and Alkim Kagit

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

The idea behind Netas Telekomunikasyon AS and Alkim Kagit 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.