Correlation Between Arcelik AS and Katmerciler Arac

Can any of the company-specific risk be diversified away by investing in both Arcelik AS and Katmerciler Arac 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 Arcelik AS and Katmerciler Arac into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Arcelik AS and Katmerciler Arac

0.35

Correlation Coefficient

Arcelik AS  Katmerciler Arac

Weak diversification

The 3 months correlation between Arcelik and Katmerciler is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Arcelik AS and Katmerciler Arac Ustu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katmerciler Arac Ustu and Arcelik AS 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 Arcelik AS are associated (or correlated) with Katmerciler Arac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katmerciler Arac Ustu has no effect on the direction of Arcelik AS i.e., Arcelik AS and Katmerciler Arac go up and down completely randomly.

Pair Corralation between Arcelik AS and Katmerciler Arac

Assuming the 90 days trading horizon Arcelik AS is expected to generate 1.01 times less return on investment than Katmerciler Arac. But when comparing it to its historical volatility, Arcelik AS is 1.04 times less risky than Katmerciler Arac. It trades about 0.37 of its potential returns per unit of risk. Katmerciler Arac Ustu is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  205.00  in Katmerciler Arac Ustu on February 1, 2024 and sell it today you would earn a total of  36.00  from holding Katmerciler Arac Ustu or generate 17.56% return on investment over 90 days.

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

Arcelik AS  vs.  Katmerciler Arac Ustu

Arcelik AS

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arcelik AS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward-looking signals, Arcelik AS demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Katmerciler Arac Ustu

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Katmerciler Arac Ustu are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Katmerciler Arac may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Arcelik AS and Katmerciler Arac

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

The idea behind Arcelik AS and Katmerciler Arac Ustu 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.