Correlation Between Hektas Ticaret and Mavi Giyim

Can any of the company-specific risk be diversified away by investing in both Hektas Ticaret and Mavi Giyim 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 Hektas Ticaret and Mavi Giyim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hektas Ticaret TAS and Mavi Giyim Sanayi, you can compare the effects of market volatilities on Hektas Ticaret and Mavi Giyim 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 Hektas Ticaret with a short position of Mavi Giyim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hektas Ticaret and Mavi Giyim.

Diversification Opportunities for Hektas Ticaret and Mavi Giyim

0.89

Correlation Coefficient

Hektas Ticaret  Mavi Giyim

Very poor diversification

The 3 months correlation between Hektas and Mavi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hektas Ticaret TAS and Mavi Giyim Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mavi Giyim Sanayi and Hektas Ticaret 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 Hektas Ticaret TAS are associated (or correlated) with Mavi Giyim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mavi Giyim Sanayi has no effect on the direction of Hektas Ticaret i.e., Hektas Ticaret and Mavi Giyim go up and down completely randomly.

Pair Corralation between Hektas Ticaret and Mavi Giyim

Assuming the 90 days trading horizon Hektas Ticaret TAS is expected to under-perform the Mavi Giyim. But the stock apears to be less risky and, when comparing its historical volatility, Hektas Ticaret TAS is 1.8 times less risky than Mavi Giyim. The stock trades about -0.01 of its potential returns per unit of risk. The Mavi Giyim Sanayi is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,193  in Mavi Giyim Sanayi on September 22, 2024 and sell it today you would earn a total of  5,337  from holding Mavi Giyim Sanayi or generate 167.15% return on investment over 90 days.

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

Hektas Ticaret TAS  vs.  Mavi Giyim Sanayi

Hektas Ticaret TAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hektas Ticaret TAS 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.

Mavi Giyim Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mavi Giyim Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mavi Giyim is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hektas Ticaret and Mavi Giyim

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

The idea behind Hektas Ticaret TAS and Mavi Giyim 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.