Correlation Between Sekerbank TAS and Ozerden Plastik

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

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

Diversification Opportunities for Sekerbank TAS and Ozerden Plastik

0.84

Correlation Coefficient

Sekerbank TAS  Ozerden Plastik

Very poor diversification

The 3 months correlation between Sekerbank and Ozerden is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sekerbank TAS and Ozerden Plastik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ozerden Plastik Sanayi and Sekerbank TAS 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 Sekerbank TAS are associated (or correlated) with Ozerden Plastik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ozerden Plastik Sanayi has no effect on the direction of Sekerbank TAS i.e., Sekerbank TAS and Ozerden Plastik go up and down completely randomly.

Pair Corralation between Sekerbank TAS and Ozerden Plastik

Assuming the 90 days trading horizon Sekerbank TAS is expected to generate 1.19 times more return on investment than Ozerden Plastik. However, Sekerbank TAS is 1.19 times more volatile than Ozerden Plastik Sanayi. It trades about 0.05 of its potential returns per unit of risk. Ozerden Plastik Sanayi is currently generating about -0.14 per unit of risk. If you would invest  479.00  in Sekerbank TAS on September 28, 2024 and sell it today you would earn a total of  8.00  from holding Sekerbank TAS or generate 1.67% return on investment over 90 days.

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

Sekerbank TAS  vs.  Ozerden Plastik Sanayi

Sekerbank TAS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sekerbank TAS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Sekerbank TAS demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Sekerbank TAS and Ozerden Plastik

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

The idea behind Sekerbank TAS and Ozerden Plastik 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.