Correlation Between Trabzon Liman and KOC METALURJI

Can any of the company-specific risk be diversified away by investing in both Trabzon Liman and KOC METALURJI 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 Trabzon Liman and KOC METALURJI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trabzon Liman Isletmeciligi and KOC METALURJI, you can compare the effects of market volatilities on Trabzon Liman and KOC METALURJI 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 Trabzon Liman with a short position of KOC METALURJI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trabzon Liman and KOC METALURJI.

Diversification Opportunities for Trabzon Liman and KOC METALURJI

0.49

Correlation Coefficient

Trabzon Liman  KOC METALURJI

Very weak diversification

The 3 months correlation between Trabzon and KOC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Trabzon Liman Isletmeciligi and KOC METALURJI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOC METALURJI and Trabzon Liman 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 Trabzon Liman Isletmeciligi are associated (or correlated) with KOC METALURJI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOC METALURJI has no effect on the direction of Trabzon Liman i.e., Trabzon Liman and KOC METALURJI go up and down completely randomly.

Pair Corralation between Trabzon Liman and KOC METALURJI

Assuming the 90 days trading horizon Trabzon Liman Isletmeciligi is expected to generate 0.95 times more return on investment than KOC METALURJI. However, Trabzon Liman Isletmeciligi is 1.05 times less risky than KOC METALURJI. It trades about 0.11 of its potential returns per unit of risk. KOC METALURJI is currently generating about 0.09 per unit of risk. If you would invest  8,435  in Trabzon Liman Isletmeciligi on October 10, 2024 and sell it today you would earn a total of  1,435  from holding Trabzon Liman Isletmeciligi or generate 17.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Trabzon Liman Isletmeciligi  vs.  KOC METALURJI

Trabzon Liman Isletm

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trabzon Liman Isletmeciligi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Trabzon Liman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

KOC METALURJI

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KOC METALURJI are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, KOC METALURJI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trabzon Liman and KOC METALURJI

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

The idea behind Trabzon Liman Isletmeciligi and KOC METALURJI 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.