Correlation Between Oyak Cimento and Galatasaray Sportif

Can any of the company-specific risk be diversified away by investing in both Oyak Cimento and Galatasaray Sportif 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 Oyak Cimento and Galatasaray Sportif into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oyak Cimento Fabrikalari and Galatasaray Sportif Sinai, you can compare the effects of market volatilities on Oyak Cimento and Galatasaray Sportif 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 Oyak Cimento with a short position of Galatasaray Sportif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oyak Cimento and Galatasaray Sportif.

Diversification Opportunities for Oyak Cimento and Galatasaray Sportif

-0.65

Correlation Coefficient

Oyak Cimento  Galatasaray Sportif

Excellent diversification

The 3 months correlation between Oyak and Galatasaray is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oyak Cimento Fabrikalari and Galatasaray Sportif Sinai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galatasaray Sportif Sinai and Oyak Cimento 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 Oyak Cimento Fabrikalari are associated (or correlated) with Galatasaray Sportif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galatasaray Sportif Sinai has no effect on the direction of Oyak Cimento i.e., Oyak Cimento and Galatasaray Sportif go up and down completely randomly.

Pair Corralation between Oyak Cimento and Galatasaray Sportif

Assuming the 90 days trading horizon Oyak Cimento is expected to generate 1.47 times less return on investment than Galatasaray Sportif. But when comparing it to its historical volatility, Oyak Cimento Fabrikalari is 1.59 times less risky than Galatasaray Sportif. It trades about 0.05 of its potential returns per unit of risk. Galatasaray Sportif Sinai is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  151.00  in Galatasaray Sportif Sinai on October 11, 2024 and sell it today you would earn a total of  60.00  from holding Galatasaray Sportif Sinai or generate 39.74% return on investment over 90 days.

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

Oyak Cimento Fabrikalari  vs.  Galatasaray Sportif Sinai

Oyak Cimento Fabrikalari

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oyak Cimento Fabrikalari are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Oyak Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Galatasaray Sportif Sinai

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Oyak Cimento and Galatasaray Sportif

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

The idea behind Oyak Cimento Fabrikalari and Galatasaray Sportif Sinai 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..