Correlation Between Koc Holding and Ayen Enerji

Can any of the company-specific risk be diversified away by investing in both Koc Holding and Ayen Enerji 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 Koc Holding and Ayen Enerji into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koc Holding AS and Ayen Enerji AS, you can compare the effects of market volatilities on Koc Holding and Ayen Enerji 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 Koc Holding with a short position of Ayen Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koc Holding and Ayen Enerji.

Diversification Opportunities for Koc Holding and Ayen Enerji

0.8

Correlation Coefficient

Koc Holding  Ayen Enerji

Very poor diversification

The 3 months correlation between Koc and Ayen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Ayen Enerji AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayen Enerji AS and Koc Holding 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 Koc Holding AS are associated (or correlated) with Ayen Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayen Enerji AS has no effect on the direction of Koc Holding i.e., Koc Holding and Ayen Enerji go up and down completely randomly.

Pair Corralation between Koc Holding and Ayen Enerji

Assuming the 90 days trading horizon Koc Holding AS is expected to under-perform the Ayen Enerji. But the stock apears to be less risky and, when comparing its historical volatility, Koc Holding AS is 1.14 times less risky than Ayen Enerji. The stock trades about -0.1 of its potential returns per unit of risk. The Ayen Enerji AS is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,020  in Ayen Enerji AS on September 22, 2024 and sell it today you would lose (88.00) from holding Ayen Enerji AS or give up 2.91% of portfolio value over 90 days.

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

Koc Holding AS  vs.  Ayen Enerji AS

Koc Holding AS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ayen Enerji AS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ayen Enerji AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ayen Enerji 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 Koc Holding and Ayen Enerji

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

The idea behind Koc Holding AS and Ayen Enerji AS 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.