Correlation Between Kartonsan Karton and Alkim Alkali

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

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

Diversification Opportunities for Kartonsan Karton and Alkim Alkali

0.83

Correlation Coefficient

Kartonsan Karton  Alkim Alkali

Very poor diversification

The 3 months correlation between Kartonsan and Alkim is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kartonsan Karton Sanayi and Alkim Alkali Kimya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Alkali Kimya and Kartonsan Karton 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 Kartonsan Karton Sanayi are associated (or correlated) with Alkim Alkali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Alkali Kimya has no effect on the direction of Kartonsan Karton i.e., Kartonsan Karton and Alkim Alkali go up and down completely randomly.

Pair Corralation between Kartonsan Karton and Alkim Alkali

Assuming the 90 days trading horizon Kartonsan Karton is expected to generate 2.41 times less return on investment than Alkim Alkali. But when comparing it to its historical volatility, Kartonsan Karton Sanayi is 1.57 times less risky than Alkim Alkali. It trades about 0.01 of its potential returns per unit of risk. Alkim Alkali Kimya is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,956  in Alkim Alkali Kimya on September 14, 2024 and sell it today you would lose (104.00) from holding Alkim Alkali Kimya or give up 5.32% of portfolio value over 90 days.

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

Kartonsan Karton Sanayi  vs.  Alkim Alkali Kimya

Kartonsan Karton Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kartonsan Karton Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Kartonsan Karton is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Alkim Alkali Kimya

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Alkali Kimya are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Alkim Alkali is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kartonsan Karton and Alkim Alkali

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

The idea behind Kartonsan Karton Sanayi and Alkim Alkali Kimya 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.