Correlation Between Alkim Kagit and Turk Tuborg

Can any of the company-specific risk be diversified away by investing in both Alkim Kagit and Turk Tuborg 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 Turk Tuborg 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 Turk Tuborg Bira, you can compare the effects of market volatilities on Alkim Kagit and Turk Tuborg 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 Turk Tuborg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkim Kagit and Turk Tuborg.

Diversification Opportunities for Alkim Kagit and Turk Tuborg

0.77

Correlation Coefficient

Alkim Kagit  Turk Tuborg

Poor diversification

The 3 months correlation between Alkim and Turk is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alkim Kagit Sanayi and Turk Tuborg Bira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turk Tuborg Bira 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 Turk Tuborg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turk Tuborg Bira has no effect on the direction of Alkim Kagit i.e., Alkim Kagit and Turk Tuborg go up and down completely randomly.

Pair Corralation between Alkim Kagit and Turk Tuborg

Assuming the 90 days trading horizon Alkim Kagit is expected to generate 2.84 times less return on investment than Turk Tuborg. In addition to that, Alkim Kagit is 1.05 times more volatile than Turk Tuborg Bira. It trades about 0.04 of its total potential returns per unit of risk. Turk Tuborg Bira is currently generating about 0.11 per unit of volatility. If you would invest  6,793  in Turk Tuborg Bira on September 23, 2024 and sell it today you would earn a total of  7,607  from holding Turk Tuborg Bira or generate 111.98% return on investment over 90 days.

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

Alkim Kagit Sanayi  vs.  Turk Tuborg Bira

Alkim Kagit Sanayi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Kagit Sanayi are ranked lower than 10 (%) 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.

Turk Tuborg Bira

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turk Tuborg Bira are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turk Tuborg 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 Turk Tuborg

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

The idea behind Alkim Kagit Sanayi and Turk Tuborg Bira 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.