Correlation Between Koza Anadolu and Hedef Holdings

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

Diversification Opportunities for Koza Anadolu and Hedef Holdings

0.22

Correlation Coefficient

Koza Anadolu  Hedef Holdings

Modest diversification

The 3 months correlation between Koza and Hedef is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Koza Anadolu Metal and Hedef Holdings AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedef Holdings AS 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 Hedef Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedef Holdings AS has no effect on the direction of Koza Anadolu i.e., Koza Anadolu and Hedef Holdings go up and down completely randomly.

Pair Corralation between Koza Anadolu and Hedef Holdings

Assuming the 90 days trading horizon Koza Anadolu Metal is expected to generate 1.31 times more return on investment than Hedef Holdings. However, Koza Anadolu is 1.31 times more volatile than Hedef Holdings AS. It trades about -0.03 of its potential returns per unit of risk. Hedef Holdings AS is currently generating about -0.07 per unit of risk. If you would invest  7,125  in Koza Anadolu Metal on September 22, 2024 and sell it today you would lose (615.00) from holding Koza Anadolu Metal or give up 8.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Koza Anadolu Metal  vs.  Hedef Holdings AS

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 newest stock price confusion, may contribute to short-horizon losses for the traders.

Hedef Holdings AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hedef Holdings AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Koza Anadolu and Hedef Holdings

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

The idea behind Koza Anadolu Metal and Hedef Holdings 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.

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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.