Correlation Between Sekerbank TAS and Seyitler Kimya

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

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

Diversification Opportunities for Sekerbank TAS and Seyitler Kimya

0.64

Correlation Coefficient

Sekerbank TAS  Seyitler Kimya

Poor diversification

The 3 months correlation between Sekerbank and Seyitler is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sekerbank TAS and Seyitler Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seyitler Kimya 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 Seyitler Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seyitler Kimya Sanayi has no effect on the direction of Sekerbank TAS i.e., Sekerbank TAS and Seyitler Kimya go up and down completely randomly.

Pair Corralation between Sekerbank TAS and Seyitler Kimya

Assuming the 90 days trading horizon Sekerbank TAS is expected to under-perform the Seyitler Kimya. But the stock apears to be less risky and, when comparing its historical volatility, Sekerbank TAS is 1.03 times less risky than Seyitler Kimya. The stock trades about -0.04 of its potential returns per unit of risk. The Seyitler Kimya Sanayi is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  327.00  in Seyitler Kimya Sanayi on December 26, 2024 and sell it today you would lose (6.00) from holding Seyitler Kimya Sanayi or give up 1.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Sekerbank TAS  vs.  Seyitler Kimya Sanayi

Sekerbank TAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sekerbank TAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Seyitler Kimya Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seyitler Kimya Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Seyitler Kimya 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 Seyitler Kimya

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

The idea behind Sekerbank TAS and Seyitler Kimya 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.