Correlation Between Vakif Menkul and Creditwest Faktoring

Can any of the company-specific risk be diversified away by investing in both Vakif Menkul and Creditwest Faktoring 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 Vakif Menkul and Creditwest Faktoring into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vakif Menkul Kiymet and Creditwest Faktoring AS, you can compare the effects of market volatilities on Vakif Menkul and Creditwest Faktoring 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 Vakif Menkul with a short position of Creditwest Faktoring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vakif Menkul and Creditwest Faktoring.

Diversification Opportunities for Vakif Menkul and Creditwest Faktoring

0.62

Correlation Coefficient

Vakif Menkul  Creditwest Faktoring

Poor diversification

The 3 months correlation between Vakif and Creditwest is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vakif Menkul Kiymet and Creditwest Faktoring AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creditwest Faktoring and Vakif Menkul 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 Vakif Menkul Kiymet are associated (or correlated) with Creditwest Faktoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creditwest Faktoring has no effect on the direction of Vakif Menkul i.e., Vakif Menkul and Creditwest Faktoring go up and down completely randomly.

Pair Corralation between Vakif Menkul and Creditwest Faktoring

Assuming the 90 days trading horizon Vakif Menkul Kiymet is expected to under-perform the Creditwest Faktoring. But the stock apears to be less risky and, when comparing its historical volatility, Vakif Menkul Kiymet is 1.31 times less risky than Creditwest Faktoring. The stock trades about -0.37 of its potential returns per unit of risk. The Creditwest Faktoring AS is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest  665.00  in Creditwest Faktoring AS on October 5, 2024 and sell it today you would lose (52.00) from holding Creditwest Faktoring AS or give up 7.82% of portfolio value over 90 days.

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

Vakif Menkul Kiymet  vs.  Creditwest Faktoring AS

Vakif Menkul Kiymet

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vakif Menkul Kiymet are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Vakif Menkul is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Creditwest Faktoring

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Creditwest Faktoring AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Creditwest Faktoring demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vakif Menkul and Creditwest Faktoring

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

The idea behind Vakif Menkul Kiymet and Creditwest Faktoring AS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.