Correlation Between Kardemir Karabuk and Emlak Konut

Can any of the company-specific risk be diversified away by investing in both Kardemir Karabuk and Emlak Konut 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 Kardemir Karabuk and Emlak Konut into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kardemir Karabuk Demir and Emlak Konut Gayrimenkul, you can compare the effects of market volatilities on Kardemir Karabuk and Emlak Konut 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 Kardemir Karabuk with a short position of Emlak Konut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardemir Karabuk and Emlak Konut.

Diversification Opportunities for Kardemir Karabuk and Emlak Konut

0.61

Correlation Coefficient

Kardemir Karabuk  Emlak Konut

Poor diversification

The 3 months correlation between Kardemir and Emlak is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kardemir Karabuk Demir and Emlak Konut Gayrimenkul in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emlak Konut Gayrimenkul and Kardemir Karabuk 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 Kardemir Karabuk Demir are associated (or correlated) with Emlak Konut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emlak Konut Gayrimenkul has no effect on the direction of Kardemir Karabuk i.e., Kardemir Karabuk and Emlak Konut go up and down completely randomly.

Pair Corralation between Kardemir Karabuk and Emlak Konut

Assuming the 90 days trading horizon Kardemir Karabuk Demir is expected to generate 0.75 times more return on investment than Emlak Konut. However, Kardemir Karabuk Demir is 1.34 times less risky than Emlak Konut. It trades about 0.18 of its potential returns per unit of risk. Emlak Konut Gayrimenkul is currently generating about 0.12 per unit of risk. If you would invest  2,368  in Kardemir Karabuk Demir on September 15, 2024 and sell it today you would earn a total of  680.00  from holding Kardemir Karabuk Demir or generate 28.72% return on investment over 90 days.

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

Kardemir Karabuk Demir  vs.  Emlak Konut Gayrimenkul

Kardemir Karabuk Demir

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kardemir Karabuk Demir are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Kardemir Karabuk demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Emlak Konut Gayrimenkul

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Emlak Konut Gayrimenkul are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Emlak Konut demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kardemir Karabuk and Emlak Konut

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

The idea behind Kardemir Karabuk Demir and Emlak Konut Gayrimenkul 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.