Correlation Between Lokman Hekim and Alkim Alkali

Can any of the company-specific risk be diversified away by investing in both Lokman Hekim and Alkim Alkali 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 Lokman Hekim and Alkim Alkali into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lokman Hekim Engurusag and Alkim Alkali Kimya, you can compare the effects of market volatilities on Lokman Hekim and Alkim Alkali 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 Lokman Hekim with a short position of Alkim Alkali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lokman Hekim and Alkim Alkali.

Diversification Opportunities for Lokman Hekim and Alkim Alkali

0.54

Correlation Coefficient

Lokman Hekim  Alkim Alkali

Very weak diversification

The 3 months correlation between Lokman and Alkim is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lokman Hekim Engurusag and Alkim Alkali Kimya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Alkali Kimya and Lokman Hekim 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 Lokman Hekim Engurusag are associated (or correlated) with Alkim Alkali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Alkali Kimya has no effect on the direction of Lokman Hekim i.e., Lokman Hekim and Alkim Alkali go up and down completely randomly.

Pair Corralation between Lokman Hekim and Alkim Alkali

Assuming the 90 days trading horizon Lokman Hekim Engurusag is expected to under-perform the Alkim Alkali. In addition to that, Lokman Hekim is 1.09 times more volatile than Alkim Alkali Kimya. It trades about -0.02 of its total potential returns per unit of risk. Alkim Alkali Kimya is currently generating about 0.07 per unit of volatility. If you would invest  1,660  in Alkim Alkali Kimya on September 25, 2024 and sell it today you would earn a total of  125.00  from holding Alkim Alkali Kimya or generate 7.53% return on investment over 90 days.

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

Lokman Hekim Engurusag  vs.  Alkim Alkali Kimya

Lokman Hekim Engurusag

Risk-Adjusted Performance

0 of 100

Very Weak

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

Alkim Alkali Kimya

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Alkali Kimya are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Alkim Alkali may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lokman Hekim and Alkim Alkali

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

The idea behind Lokman Hekim Engurusag and Alkim Alkali Kimya 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.