Correlation Between Steel Dynamics and Koza Altin

Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Koza Altin 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 Steel Dynamics and Koza Altin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Steel Dynamics and Koza Altin Isletmeleri, you can compare the effects of market volatilities on Steel Dynamics and Koza Altin 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 Steel Dynamics with a short position of Koza Altin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Koza Altin.

Diversification Opportunities for Steel Dynamics and Koza Altin

0.44

Correlation Coefficient

Steel Dynamics  Koza Altin

Very weak diversification

The 3 months correlation between Steel and Koza is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Koza Altin Isletmeleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koza Altin Isletmeleri and Steel Dynamics 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 Steel Dynamics are associated (or correlated) with Koza Altin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koza Altin Isletmeleri has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Koza Altin go up and down completely randomly.

Pair Corralation between Steel Dynamics and Koza Altin

Given the investment horizon of 90 days Steel Dynamics is expected to under-perform the Koza Altin. But the stock apears to be less risky and, when comparing its historical volatility, Steel Dynamics is 1.13 times less risky than Koza Altin. The stock trades about -0.04 of its potential returns per unit of risk. The Koza Altin Isletmeleri is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,292  in Koza Altin Isletmeleri on December 2, 2024 and sell it today you would lose (52.00) from holding Koza Altin Isletmeleri or give up 2.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.85%
Values	Daily Returns

Steel Dynamics  vs.  Koza Altin Isletmeleri

Steel Dynamics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Steel Dynamics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Steel Dynamics is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Koza Altin Isletmeleri

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Steel Dynamics and Koza Altin

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

The idea behind Steel Dynamics and Koza Altin Isletmeleri 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.