Correlation Between Koza Anadolu and Garanti Faktoring

Can any of the company-specific risk be diversified away by investing in both Koza Anadolu and Garanti Faktoring 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 Garanti Faktoring 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 Garanti Faktoring AS, you can compare the effects of market volatilities on Koza Anadolu and Garanti Faktoring 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 Garanti Faktoring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koza Anadolu and Garanti Faktoring.

Diversification Opportunities for Koza Anadolu and Garanti Faktoring

0.74

Correlation Coefficient

Koza Anadolu  Garanti Faktoring

Poor diversification

The 3 months correlation between Koza and Garanti is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Koza Anadolu Metal and Garanti Faktoring AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garanti Faktoring 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 Garanti Faktoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garanti Faktoring has no effect on the direction of Koza Anadolu i.e., Koza Anadolu and Garanti Faktoring go up and down completely randomly.

Pair Corralation between Koza Anadolu and Garanti Faktoring

Assuming the 90 days trading horizon Koza Anadolu Metal is expected to generate 2.2 times more return on investment than Garanti Faktoring. However, Koza Anadolu is 2.2 times more volatile than Garanti Faktoring AS. It trades about 0.15 of its potential returns per unit of risk. Garanti Faktoring AS is currently generating about 0.15 per unit of risk. If you would invest  6,425  in Koza Anadolu Metal on September 16, 2024 and sell it today you would earn a total of  625.00  from holding Koza Anadolu Metal or generate 9.73% return on investment over 90 days.

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

Koza Anadolu Metal  vs.  Garanti Faktoring AS

Koza Anadolu Metal

Risk-Adjusted Performance

2 of 100

Weak

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

Garanti Faktoring

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Garanti Faktoring AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Garanti Faktoring 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 Garanti Faktoring

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

The idea behind Koza Anadolu Metal and Garanti Faktoring 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.