Correlation Between Ozerden Plastik and Sekerbank TAS

Can any of the company-specific risk be diversified away by investing in both Ozerden Plastik and Sekerbank TAS 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 Ozerden Plastik and Sekerbank TAS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ozerden Plastik Sanayi and Sekerbank TAS, you can compare the effects of market volatilities on Ozerden Plastik and Sekerbank TAS 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 Ozerden Plastik with a short position of Sekerbank TAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ozerden Plastik and Sekerbank TAS.

Diversification Opportunities for Ozerden Plastik and Sekerbank TAS

0.85

Correlation Coefficient

Ozerden Plastik  Sekerbank TAS

Very poor diversification

The 3 months correlation between Ozerden and Sekerbank is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ozerden Plastik Sanayi and Sekerbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekerbank TAS and Ozerden Plastik 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 Ozerden Plastik Sanayi are associated (or correlated) with Sekerbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekerbank TAS has no effect on the direction of Ozerden Plastik i.e., Ozerden Plastik and Sekerbank TAS go up and down completely randomly.

Pair Corralation between Ozerden Plastik and Sekerbank TAS

Assuming the 90 days trading horizon Ozerden Plastik Sanayi is expected to under-perform the Sekerbank TAS. But the stock apears to be less risky and, when comparing its historical volatility, Ozerden Plastik Sanayi is 1.3 times less risky than Sekerbank TAS. The stock trades about -0.11 of its potential returns per unit of risk. The Sekerbank TAS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  460.00  in Sekerbank TAS on September 27, 2024 and sell it today you would earn a total of  30.00  from holding Sekerbank TAS or generate 6.52% return on investment over 90 days.

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

Ozerden Plastik Sanayi  vs.  Sekerbank TAS

Ozerden Plastik Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sekerbank TAS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sekerbank TAS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Sekerbank TAS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ozerden Plastik and Sekerbank TAS

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

The idea behind Ozerden Plastik Sanayi and Sekerbank TAS 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 Anywhere module to track or share privately all of your investments from the convenience of any device.