Correlation Between Alkim Kagit and Lokman Hekim

Can any of the company-specific risk be diversified away by investing in both Alkim Kagit and Lokman Hekim 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 Alkim Kagit and Lokman Hekim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alkim Kagit Sanayi and Lokman Hekim Engurusag, you can compare the effects of market volatilities on Alkim Kagit and Lokman Hekim 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 Alkim Kagit with a short position of Lokman Hekim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkim Kagit and Lokman Hekim.

Diversification Opportunities for Alkim Kagit and Lokman Hekim

0.49

Correlation Coefficient

Alkim Kagit  Lokman Hekim

Very weak diversification

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

Pair Corralation between Alkim Kagit and Lokman Hekim

Assuming the 90 days trading horizon Alkim Kagit Sanayi is expected to generate 3.15 times more return on investment than Lokman Hekim. However, Alkim Kagit is 3.15 times more volatile than Lokman Hekim Engurusag. It trades about 0.34 of its potential returns per unit of risk. Lokman Hekim Engurusag is currently generating about -0.19 per unit of risk. If you would invest  655.00  in Alkim Kagit Sanayi on September 25, 2024 and sell it today you would earn a total of  185.00  from holding Alkim Kagit Sanayi or generate 28.24% return on investment over 90 days.

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

Alkim Kagit Sanayi  vs.  Lokman Hekim Engurusag

Alkim Kagit Sanayi

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Kagit Sanayi are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Alkim Kagit unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lokman Hekim Engurusag

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Alkim Kagit and Lokman Hekim

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

The idea behind Alkim Kagit Sanayi and Lokman Hekim Engurusag 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.