Correlation Between Kocaer Celik and Alfas Solar
Can any of the company-specific risk be diversified away by investing in both Kocaer Celik and Alfas Solar 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 Kocaer Celik and Alfas Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kocaer Celik Sanayi and Alfas Solar Enerji, you can compare the effects of market volatilities on Kocaer Celik and Alfas Solar 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 Kocaer Celik with a short position of Alfas Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kocaer Celik and Alfas Solar.
Diversification Opportunities for Kocaer Celik and Alfas Solar
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kocaer and Alfas is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kocaer Celik Sanayi and Alfas Solar Enerji in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfas Solar Enerji and Kocaer Celik 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 Kocaer Celik Sanayi are associated (or correlated) with Alfas Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfas Solar Enerji has no effect on the direction of Kocaer Celik i.e., Kocaer Celik and Alfas Solar go up and down completely randomly.
Pair Corralation between Kocaer Celik and Alfas Solar
Assuming the 90 days trading horizon Kocaer Celik Sanayi is expected to generate 0.89 times more return on investment than Alfas Solar. However, Kocaer Celik Sanayi is 1.12 times less risky than Alfas Solar. It trades about 0.23 of its potential returns per unit of risk. Alfas Solar Enerji is currently generating about -0.04 per unit of risk. If you would invest 3,710 in Kocaer Celik Sanayi on August 29, 2024 and sell it today you would earn a total of 420.00 from holding Kocaer Celik Sanayi or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kocaer Celik Sanayi vs. Alfas Solar Enerji
Performance |
| Timeline |
| Kocaer Celik Sanayi |
| Alfas Solar Enerji |
Kocaer Celik and Alfas Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kocaer Celik and Alfas Solar
The main advantage of trading using opposite Kocaer Celik and Alfas Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kocaer Celik position performs unexpectedly, Alfas Solar 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 Alfas Solar will offset losses from the drop in Alfas Solar's long position.| Kocaer Celik vs. Gentas Genel Metal | Kocaer Celik vs. Qnb Finansbank AS | Kocaer Celik vs. Cuhadaroglu Metal Sanayi | Kocaer Celik vs. Sodas Sodyum Sanayi |
| Alfas Solar vs. Trabzonspor Sportif Yatirim | Alfas Solar vs. Cuhadaroglu Metal Sanayi | Alfas Solar vs. MEGA METAL | Alfas Solar vs. Creditwest Faktoring AS |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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