Correlation Between Koza Anadolu and Ege Profil

Can any of the company-specific risk be diversified away by investing in both Koza Anadolu and Ege Profil 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 Koza Anadolu and Ege Profil into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koza Anadolu Metal and Ege Profil Ticaret, you can compare the effects of market volatilities on Koza Anadolu and Ege Profil 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 Koza Anadolu with a short position of Ege Profil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koza Anadolu and Ege Profil.

Diversification Opportunities for Koza Anadolu and Ege Profil

0.84

Correlation Coefficient

Koza Anadolu  Ege Profil

Very poor diversification

The 3 months correlation between Koza and Ege is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Koza Anadolu Metal and Ege Profil Ticaret in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Profil Ticaret and Koza Anadolu 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 Koza Anadolu Metal are associated (or correlated) with Ege Profil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Profil Ticaret has no effect on the direction of Koza Anadolu i.e., Koza Anadolu and Ege Profil go up and down completely randomly.

Pair Corralation between Koza Anadolu and Ege Profil

Assuming the 90 days trading horizon Koza Anadolu Metal is expected to under-perform the Ege Profil. In addition to that, Koza Anadolu is 1.65 times more volatile than Ege Profil Ticaret. It trades about -0.02 of its total potential returns per unit of risk. Ege Profil Ticaret is currently generating about 0.02 per unit of volatility. If you would invest  16,150  in Ege Profil Ticaret on September 24, 2024 and sell it today you would earn a total of  210.00  from holding Ege Profil Ticaret or generate 1.3% return on investment over 90 days.

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

Koza Anadolu Metal  vs.  Ege Profil Ticaret

Koza Anadolu Metal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ege Profil Ticaret

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ege Profil Ticaret are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Ege Profil is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Koza Anadolu and Ege Profil

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

The idea behind Koza Anadolu Metal and Ege Profil Ticaret 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.