Correlation Between Sodas Sodyum and Karsan Otomotiv

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

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

Diversification Opportunities for Sodas Sodyum and Karsan Otomotiv

0.36

Correlation Coefficient

Sodas Sodyum  Karsan Otomotiv

Weak diversification

The 3 months correlation between Sodas and Karsan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sodas Sodyum Sanayi and Karsan Otomotiv Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karsan Otomotiv Sanayi and Sodas Sodyum 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 Sodas Sodyum Sanayi are associated (or correlated) with Karsan Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karsan Otomotiv Sanayi has no effect on the direction of Sodas Sodyum i.e., Sodas Sodyum and Karsan Otomotiv go up and down completely randomly.

Pair Corralation between Sodas Sodyum and Karsan Otomotiv

Assuming the 90 days trading horizon Sodas Sodyum Sanayi is expected to under-perform the Karsan Otomotiv. In addition to that, Sodas Sodyum is 2.42 times more volatile than Karsan Otomotiv Sanayi. It trades about -0.02 of its total potential returns per unit of risk. Karsan Otomotiv Sanayi is currently generating about 0.02 per unit of volatility. If you would invest  1,258  in Karsan Otomotiv Sanayi on October 15, 2024 and sell it today you would earn a total of  5.00  from holding Karsan Otomotiv Sanayi or generate 0.4% return on investment over 90 days.

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

Sodas Sodyum Sanayi  vs.  Karsan Otomotiv Sanayi

Sodas Sodyum Sanayi

Risk-Adjusted Performance

0 of 100

Weak

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

Karsan Otomotiv Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Karsan Otomotiv Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent 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.

Pair Trading with Sodas Sodyum and Karsan Otomotiv

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

The idea behind Sodas Sodyum Sanayi and Karsan Otomotiv 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.