Correlation Between Ford Otomotiv and Koc Holding
Can any of the company-specific risk be diversified away by investing in both Ford Otomotiv and Koc Holding 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 Ford Otomotiv and Koc Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Otomotiv Sanayi and Koc Holding AS, you can compare the effects of market volatilities on Ford Otomotiv and Koc Holding 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 Ford Otomotiv with a short position of Koc Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford Otomotiv and Koc Holding.
Diversification Opportunities for Ford Otomotiv and Koc Holding
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and Koc is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ford Otomotiv Sanayi and Koc Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koc Holding AS and Ford Otomotiv 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 Ford Otomotiv Sanayi are associated (or correlated) with Koc Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koc Holding AS has no effect on the direction of Ford Otomotiv i.e., Ford Otomotiv and Koc Holding go up and down completely randomly.
Pair Corralation between Ford Otomotiv and Koc Holding
Assuming the 90 days trading horizon Ford Otomotiv is expected to generate 24.67 times less return on investment than Koc Holding. In addition to that, Ford Otomotiv is 1.25 times more volatile than Koc Holding AS. It trades about 0.01 of its total potential returns per unit of risk. Koc Holding AS is currently generating about 0.35 per unit of volatility. If you would invest 17,300 in Koc Holding AS on August 31, 2024 and sell it today you would earn a total of 2,800 from holding Koc Holding AS or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Otomotiv Sanayi vs. Koc Holding AS
Performance |
| Timeline |
| Ford Otomotiv Sanayi |
| Koc Holding AS |
Ford Otomotiv and Koc Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford Otomotiv and Koc Holding
The main advantage of trading using opposite Ford Otomotiv and Koc Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford Otomotiv position performs unexpectedly, Koc Holding 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 Koc Holding will offset losses from the drop in Koc Holding's long position.| Ford Otomotiv vs. Eregli Demir ve | Ford Otomotiv vs. Tofas Turk Otomobil | Ford Otomotiv vs. Turkiye Petrol Rafinerileri | Ford Otomotiv vs. Turkiye Sise ve |
| Koc Holding vs. Haci Omer Sabanci | Koc Holding vs. Turkiye Sise ve | Koc Holding vs. Turkiye Petrol Rafinerileri | Koc Holding vs. Turkiye Garanti Bankasi |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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