Correlation Between Bosch Fren and Alkim Kagit

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

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

Diversification Opportunities for Bosch Fren and Alkim Kagit

-0.31

Correlation Coefficient

Bosch Fren  Alkim Kagit

Very good diversification

The 3 months correlation between Bosch and Alkim is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bosch Fren Sistemleri and Alkim Kagit Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Kagit Sanayi and Bosch Fren 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 Bosch Fren Sistemleri are associated (or correlated) with Alkim Kagit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Kagit Sanayi has no effect on the direction of Bosch Fren i.e., Bosch Fren and Alkim Kagit go up and down completely randomly.

Pair Corralation between Bosch Fren and Alkim Kagit

Assuming the 90 days trading horizon Bosch Fren Sistemleri is expected to under-perform the Alkim Kagit. But the stock apears to be less risky and, when comparing its historical volatility, Bosch Fren Sistemleri is 1.07 times less risky than Alkim Kagit. The stock trades about -0.03 of its potential returns per unit of risk. The Alkim Kagit Sanayi is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  668.00  in Alkim Kagit Sanayi on September 24, 2024 and sell it today you would earn a total of  172.00  from holding Alkim Kagit Sanayi or generate 25.75% return on investment over 90 days.

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

Bosch Fren Sistemleri  vs.  Alkim Kagit Sanayi

Bosch Fren Sistemleri

Risk-Adjusted Performance

0 of 100

Very Weak

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

Alkim Kagit Sanayi

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Kagit Sanayi are ranked lower than 11 (%) 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.

Pair Trading with Bosch Fren and Alkim Kagit

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

The idea behind Bosch Fren Sistemleri and Alkim Kagit Sanayi 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..