Correlation Between Seker Finansal and Borlease Otomotiv

Can any of the company-specific risk be diversified away by investing in both Seker Finansal and Borlease Otomotiv 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 Seker Finansal and Borlease Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seker Finansal Kiralama and Borlease Otomotiv AS, you can compare the effects of market volatilities on Seker Finansal and Borlease Otomotiv 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 Seker Finansal with a short position of Borlease Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seker Finansal and Borlease Otomotiv.

Diversification Opportunities for Seker Finansal and Borlease Otomotiv

-0.33

Correlation Coefficient

Seker Finansal  Borlease Otomotiv

Very good diversification

The 3 months correlation between Seker and Borlease is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Seker Finansal Kiralama and Borlease Otomotiv AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borlease Otomotiv and Seker Finansal 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 Seker Finansal Kiralama are associated (or correlated) with Borlease Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borlease Otomotiv has no effect on the direction of Seker Finansal i.e., Seker Finansal and Borlease Otomotiv go up and down completely randomly.

Pair Corralation between Seker Finansal and Borlease Otomotiv

Assuming the 90 days trading horizon Seker Finansal Kiralama is expected to under-perform the Borlease Otomotiv. In addition to that, Seker Finansal is 1.26 times more volatile than Borlease Otomotiv AS. It trades about -0.02 of its total potential returns per unit of risk. Borlease Otomotiv AS is currently generating about 0.12 per unit of volatility. If you would invest  6,725  in Borlease Otomotiv AS on December 23, 2024 and sell it today you would earn a total of  1,295  from holding Borlease Otomotiv AS or generate 19.26% return on investment over 90 days.

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

Seker Finansal Kiralama  vs.  Borlease Otomotiv AS

Seker Finansal Kiralama

Risk-Adjusted Performance

Very Weak

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

Borlease Otomotiv

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Borlease Otomotiv demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seker Finansal and Borlease Otomotiv

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

The idea behind Seker Finansal Kiralama and Borlease Otomotiv AS 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.