Correlation Between Tofas Turk and Koc Holding
Can any of the company-specific risk be diversified away by investing in both Tofas Turk 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 Tofas Turk and Koc Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tofas Turk Otomobil and Koc Holding AS, you can compare the effects of market volatilities on Tofas Turk 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 Tofas Turk with a short position of Koc Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tofas Turk and Koc Holding.
Diversification Opportunities for Tofas Turk and Koc Holding
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tofas and Koc is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil 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 Tofas Turk 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 Tofas Turk Otomobil 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 Tofas Turk i.e., Tofas Turk and Koc Holding go up and down completely randomly.
Pair Corralation between Tofas Turk and Koc Holding
Assuming the 90 days trading horizon Tofas Turk is expected to generate 1.68 times less return on investment than Koc Holding. In addition to that, Tofas Turk is 1.09 times more volatile than Koc Holding AS. It trades about 0.05 of its total potential returns per unit of risk. Koc Holding AS is currently generating about 0.1 per unit of volatility. If you would invest 6,442 in Koc Holding AS on August 24, 2024 and sell it today you would earn a total of 12,418 from holding Koc Holding AS or generate 192.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tofas Turk Otomobil vs. Koc Holding AS
Performance |
| Timeline |
| Tofas Turk Otomobil |
| Koc Holding AS |
Tofas Turk and Koc Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tofas Turk and Koc Holding
The main advantage of trading using opposite Tofas Turk and Koc Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tofas Turk 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.| Tofas Turk vs. Ford Otomotiv Sanayi | Tofas Turk vs. Eregli Demir ve | Tofas Turk vs. Turkiye Petrol Rafinerileri | Tofas Turk 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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