Correlation Between Koc Holding and Penta Teknoloji

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

Diversification Opportunities for Koc Holding and Penta Teknoloji

0.68

Correlation Coefficient

Koc Holding  Penta Teknoloji

Poor diversification

The 3 months correlation between Koc and Penta is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Penta Teknoloji Urunleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Teknoloji Urunleri 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 Penta Teknoloji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Teknoloji Urunleri has no effect on the direction of Koc Holding i.e., Koc Holding and Penta Teknoloji go up and down completely randomly.

Pair Corralation between Koc Holding and Penta Teknoloji

Assuming the 90 days trading horizon Koc Holding AS is expected to under-perform the Penta Teknoloji. In addition to that, Koc Holding is 1.1 times more volatile than Penta Teknoloji Urunleri. It trades about 0.0 of its total potential returns per unit of risk. Penta Teknoloji Urunleri is currently generating about 0.03 per unit of volatility. If you would invest  1,505  in Penta Teknoloji Urunleri on September 21, 2024 and sell it today you would earn a total of  40.00  from holding Penta Teknoloji Urunleri or generate 2.66% 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.  Penta Teknoloji Urunleri

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.

Penta Teknoloji Urunleri

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Koc Holding and Penta Teknoloji

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

The idea behind Koc Holding AS and Penta Teknoloji Urunleri 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.