Correlation Between Kent Gida and Bosch Fren

Can any of the company-specific risk be diversified away by investing in both Kent Gida and Bosch Fren 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 Kent Gida and Bosch Fren into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kent Gida Maddeleri and Bosch Fren Sistemleri, you can compare the effects of market volatilities on Kent Gida and Bosch Fren 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 Kent Gida with a short position of Bosch Fren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kent Gida and Bosch Fren.

Diversification Opportunities for Kent Gida and Bosch Fren

-0.25

Correlation Coefficient

Kent Gida  Bosch Fren

Very good diversification

The 3 months correlation between Kent and Bosch is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kent Gida Maddeleri and Bosch Fren Sistemleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosch Fren Sistemleri and Kent Gida 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 Kent Gida Maddeleri are associated (or correlated) with Bosch Fren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosch Fren Sistemleri has no effect on the direction of Kent Gida i.e., Kent Gida and Bosch Fren go up and down completely randomly.

Pair Corralation between Kent Gida and Bosch Fren

Assuming the 90 days trading horizon Kent Gida Maddeleri is expected to generate 1.48 times more return on investment than Bosch Fren. However, Kent Gida is 1.48 times more volatile than Bosch Fren Sistemleri. It trades about 0.08 of its potential returns per unit of risk. Bosch Fren Sistemleri is currently generating about -0.04 per unit of risk. If you would invest  91,450  in Kent Gida Maddeleri on September 22, 2024 and sell it today you would earn a total of  13,850  from holding Kent Gida Maddeleri or generate 15.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Kent Gida Maddeleri  vs.  Bosch Fren Sistemleri

Kent Gida Maddeleri

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kent Gida Maddeleri are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Kent Gida unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bosch Fren Sistemleri

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kent Gida and Bosch Fren

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

The idea behind Kent Gida Maddeleri and Bosch Fren Sistemleri 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.