Correlation Between Alarko Carrier and Iskenderun Demir

Can any of the company-specific risk be diversified away by investing in both Alarko Carrier and Iskenderun Demir 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 Alarko Carrier and Iskenderun Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alarko Carrier Sanayi and Iskenderun Demir ve, you can compare the effects of market volatilities on Alarko Carrier and Iskenderun Demir 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 Alarko Carrier with a short position of Iskenderun Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alarko Carrier and Iskenderun Demir.

Diversification Opportunities for Alarko Carrier and Iskenderun Demir

0.3

Correlation Coefficient

Alarko Carrier  Iskenderun Demir

Weak diversification

The 3 months correlation between Alarko and Iskenderun is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Alarko Carrier Sanayi and Iskenderun Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iskenderun Demir and Alarko Carrier 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 Alarko Carrier Sanayi are associated (or correlated) with Iskenderun Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iskenderun Demir has no effect on the direction of Alarko Carrier i.e., Alarko Carrier and Iskenderun Demir go up and down completely randomly.

Pair Corralation between Alarko Carrier and Iskenderun Demir

Assuming the 90 days trading horizon Alarko Carrier Sanayi is expected to under-perform the Iskenderun Demir. In addition to that, Alarko Carrier is 1.01 times more volatile than Iskenderun Demir ve. It trades about -0.07 of its total potential returns per unit of risk. Iskenderun Demir ve is currently generating about 0.13 per unit of volatility. If you would invest  3,526  in Iskenderun Demir ve on September 13, 2024 and sell it today you would earn a total of  620.00  from holding Iskenderun Demir ve or generate 17.58% return on investment over 90 days.

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

Alarko Carrier Sanayi  vs.  Iskenderun Demir ve

Alarko Carrier Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alarko Carrier 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.

Iskenderun Demir

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with Alarko Carrier and Iskenderun Demir

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

The idea behind Alarko Carrier Sanayi and Iskenderun Demir ve 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.