Correlation Between Burcelik Vana and Konya Cimento

Can any of the company-specific risk be diversified away by investing in both Burcelik Vana and Konya Cimento 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 Burcelik Vana and Konya Cimento into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Burcelik Vana Sanayi and Konya Cimento Sanayi, you can compare the effects of market volatilities on Burcelik Vana and Konya Cimento 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 Burcelik Vana with a short position of Konya Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burcelik Vana and Konya Cimento.

Diversification Opportunities for Burcelik Vana and Konya Cimento

-0.65

Correlation Coefficient

Burcelik Vana  Konya Cimento

Excellent diversification

The 3 months correlation between Burcelik and Konya is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Burcelik Vana Sanayi and Konya Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konya Cimento Sanayi and Burcelik Vana 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 Burcelik Vana Sanayi are associated (or correlated) with Konya Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konya Cimento Sanayi has no effect on the direction of Burcelik Vana i.e., Burcelik Vana and Konya Cimento go up and down completely randomly.

Pair Corralation between Burcelik Vana and Konya Cimento

Assuming the 90 days trading horizon Burcelik Vana Sanayi is expected to under-perform the Konya Cimento. In addition to that, Burcelik Vana is 1.18 times more volatile than Konya Cimento Sanayi. It trades about -0.07 of its total potential returns per unit of risk. Konya Cimento Sanayi is currently generating about 0.04 per unit of volatility. If you would invest  672,250  in Konya Cimento Sanayi on September 23, 2024 and sell it today you would earn a total of  28,750  from holding Konya Cimento Sanayi or generate 4.28% return on investment over 90 days.

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

Burcelik Vana Sanayi  vs.  Konya Cimento Sanayi

Burcelik Vana Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Burcelik Vana Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Konya Cimento Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Konya Cimento Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Konya Cimento may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Burcelik Vana and Konya Cimento

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

The idea behind Burcelik Vana Sanayi and Konya Cimento 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.