Correlation Between Koc Holding and Euro Kapital

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

Diversification Opportunities for Koc Holding and Euro Kapital

0.61

Correlation Coefficient

Koc Holding  Euro Kapital

Poor diversification

The 3 months correlation between Koc and Euro is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Euro Kapital Yatirim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Kapital Yatirim 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 Euro Kapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Kapital Yatirim has no effect on the direction of Koc Holding i.e., Koc Holding and Euro Kapital go up and down completely randomly.

Pair Corralation between Koc Holding and Euro Kapital

Assuming the 90 days trading horizon Koc Holding AS is expected to under-perform the Euro Kapital. But the stock apears to be less risky and, when comparing its historical volatility, Koc Holding AS is 1.7 times less risky than Euro Kapital. The stock trades about 0.0 of its potential returns per unit of risk. The Euro Kapital Yatirim is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,385  in Euro Kapital Yatirim on September 23, 2024 and sell it today you would earn a total of  51.00  from holding Euro Kapital Yatirim or generate 3.68% return on investment over 90 days.

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

Koc Holding AS  vs.  Euro Kapital Yatirim

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.

Euro Kapital Yatirim

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Koc Holding and Euro Kapital

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

The idea behind Koc Holding AS and Euro Kapital Yatirim 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.