Correlation Between Kuyas Yatirim and Sekerbank TAS

Can any of the company-specific risk be diversified away by investing in both Kuyas Yatirim and Sekerbank TAS 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 Kuyas Yatirim and Sekerbank TAS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kuyas Yatirim AS and Sekerbank TAS, you can compare the effects of market volatilities on Kuyas Yatirim and Sekerbank TAS 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 Kuyas Yatirim with a short position of Sekerbank TAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuyas Yatirim and Sekerbank TAS.

Diversification Opportunities for Kuyas Yatirim and Sekerbank TAS

0.23

Correlation Coefficient

Kuyas Yatirim  Sekerbank TAS

Modest diversification

The 3 months correlation between Kuyas and Sekerbank is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kuyas Yatirim AS and Sekerbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekerbank TAS and Kuyas Yatirim 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 Kuyas Yatirim AS are associated (or correlated) with Sekerbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekerbank TAS has no effect on the direction of Kuyas Yatirim i.e., Kuyas Yatirim and Sekerbank TAS go up and down completely randomly.

Pair Corralation between Kuyas Yatirim and Sekerbank TAS

Assuming the 90 days trading horizon Kuyas Yatirim AS is expected to generate 0.87 times more return on investment than Sekerbank TAS. However, Kuyas Yatirim AS is 1.15 times less risky than Sekerbank TAS. It trades about 0.11 of its potential returns per unit of risk. Sekerbank TAS is currently generating about 0.09 per unit of risk. If you would invest  1,553  in Kuyas Yatirim AS on September 12, 2024 and sell it today you would earn a total of  245.00  from holding Kuyas Yatirim AS or generate 15.78% return on investment over 90 days.

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

Kuyas Yatirim AS  vs.  Sekerbank TAS

Kuyas Yatirim AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kuyas Yatirim AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kuyas Yatirim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Sekerbank TAS

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sekerbank TAS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Sekerbank TAS demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kuyas Yatirim and Sekerbank TAS

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

The idea behind Kuyas Yatirim AS and Sekerbank TAS 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.