Correlation Between Dogu Aras and Koza Anadolu

Can any of the company-specific risk be diversified away by investing in both Dogu Aras and Koza Anadolu 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 Dogu Aras and Koza Anadolu into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dogu Aras Enerji and Koza Anadolu Metal, you can compare the effects of market volatilities on Dogu Aras and Koza Anadolu 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 Dogu Aras with a short position of Koza Anadolu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dogu Aras and Koza Anadolu.

Diversification Opportunities for Dogu Aras and Koza Anadolu

-0.35

Correlation Coefficient

Dogu Aras  Koza Anadolu

Very good diversification

The 3 months correlation between Dogu and Koza is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dogu Aras Enerji and Koza Anadolu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koza Anadolu Metal and Dogu Aras 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 Dogu Aras Enerji are associated (or correlated) with Koza Anadolu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koza Anadolu Metal has no effect on the direction of Dogu Aras i.e., Dogu Aras and Koza Anadolu go up and down completely randomly.

Pair Corralation between Dogu Aras and Koza Anadolu

Assuming the 90 days trading horizon Dogu Aras Enerji is expected to under-perform the Koza Anadolu. But the stock apears to be less risky and, when comparing its historical volatility, Dogu Aras Enerji is 1.27 times less risky than Koza Anadolu. The stock trades about -0.07 of its potential returns per unit of risk. The Koza Anadolu Metal is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  7,125  in Koza Anadolu Metal on September 23, 2024 and sell it today you would lose (615.00) from holding Koza Anadolu Metal or give up 8.63% of portfolio value over 90 days.

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

Dogu Aras Enerji  vs.  Koza Anadolu Metal

Dogu Aras Enerji

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dogu Aras Enerji 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.

Koza Anadolu Metal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dogu Aras and Koza Anadolu

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

The idea behind Dogu Aras Enerji and Koza Anadolu Metal 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.