Correlation Between Kartonsan Karton and Gedik Yatirim

Can any of the company-specific risk be diversified away by investing in both Kartonsan Karton and Gedik Yatirim 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 Gedik Yatirim 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 Gedik Yatirim Menkul, you can compare the effects of market volatilities on Kartonsan Karton and Gedik Yatirim 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 Gedik Yatirim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kartonsan Karton and Gedik Yatirim.

Diversification Opportunities for Kartonsan Karton and Gedik Yatirim

0.27

Correlation Coefficient

Kartonsan Karton  Gedik Yatirim

Modest diversification

The 3 months correlation between Kartonsan and Gedik is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kartonsan Karton Sanayi and Gedik Yatirim Menkul in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gedik Yatirim Menkul 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 Gedik Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gedik Yatirim Menkul has no effect on the direction of Kartonsan Karton i.e., Kartonsan Karton and Gedik Yatirim go up and down completely randomly.

Pair Corralation between Kartonsan Karton and Gedik Yatirim

Assuming the 90 days trading horizon Kartonsan Karton is expected to generate 3.73 times less return on investment than Gedik Yatirim. But when comparing it to its historical volatility, Kartonsan Karton Sanayi is 1.03 times less risky than Gedik Yatirim. It trades about 0.05 of its potential returns per unit of risk. Gedik Yatirim Menkul is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  619.00  in Gedik Yatirim Menkul on September 12, 2024 and sell it today you would earn a total of  185.00  from holding Gedik Yatirim Menkul or generate 29.89% return on investment over 90 days.

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

Kartonsan Karton Sanayi  vs.  Gedik Yatirim Menkul

Kartonsan Karton Sanayi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kartonsan Karton Sanayi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kartonsan Karton may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gedik Yatirim Menkul

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gedik Yatirim Menkul are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gedik Yatirim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kartonsan Karton and Gedik Yatirim

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

The idea behind Kartonsan Karton Sanayi and Gedik Yatirim Menkul 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.