Correlation Between Trabzonspor Sportif and Kent Gida

Can any of the company-specific risk be diversified away by investing in both Trabzonspor Sportif and Kent Gida 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 Trabzonspor Sportif and Kent Gida into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trabzonspor Sportif Yatirim and Kent Gida Maddeleri, you can compare the effects of market volatilities on Trabzonspor Sportif and Kent Gida 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 Trabzonspor Sportif with a short position of Kent Gida. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trabzonspor Sportif and Kent Gida.

Diversification Opportunities for Trabzonspor Sportif and Kent Gida

-0.02

Correlation Coefficient

Trabzonspor Sportif  Kent Gida

Good diversification

The 3 months correlation between Trabzonspor and Kent is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Trabzonspor Sportif Yatirim and Kent Gida Maddeleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kent Gida Maddeleri and Trabzonspor Sportif 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 Trabzonspor Sportif Yatirim are associated (or correlated) with Kent Gida. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kent Gida Maddeleri has no effect on the direction of Trabzonspor Sportif i.e., Trabzonspor Sportif and Kent Gida go up and down completely randomly.

Pair Corralation between Trabzonspor Sportif and Kent Gida

Assuming the 90 days trading horizon Trabzonspor Sportif is expected to generate 1.24 times less return on investment than Kent Gida. But when comparing it to its historical volatility, Trabzonspor Sportif Yatirim is 1.44 times less risky than Kent Gida. It trades about 0.18 of its potential returns per unit of risk. Kent Gida Maddeleri is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  77,700  in Kent Gida Maddeleri on October 9, 2024 and sell it today you would earn a total of  21,700  from holding Kent Gida Maddeleri or generate 27.93% return on investment over 90 days.

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

Trabzonspor Sportif Yatirim  vs.  Kent Gida Maddeleri

Trabzonspor Sportif

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trabzonspor Sportif Yatirim are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Trabzonspor Sportif demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Kent Gida Maddeleri

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kent Gida Maddeleri are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Kent Gida unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trabzonspor Sportif and Kent Gida

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

The idea behind Trabzonspor Sportif Yatirim and Kent Gida Maddeleri 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.