Correlation Between Koc Holding and Yapi Ve

Can any of the company-specific risk be diversified away by investing in both Koc Holding and Yapi Ve 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 Koc Holding and Yapi Ve into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koc Holding AS and Yapi ve Kredi, you can compare the effects of market volatilities on Koc Holding and Yapi Ve 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 Koc Holding with a short position of Yapi Ve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koc Holding and Yapi Ve.

Diversification Opportunities for Koc Holding and Yapi Ve

0.95

Correlation Coefficient

Koc Holding  Yapi Ve

Almost no diversification

The 3 months correlation between Koc and Yapi is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Yapi ve Kredi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yapi ve Kredi and Koc Holding 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 Koc Holding AS are associated (or correlated) with Yapi Ve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yapi ve Kredi has no effect on the direction of Koc Holding i.e., Koc Holding and Yapi Ve go up and down completely randomly.

Pair Corralation between Koc Holding and Yapi Ve

Assuming the 90 days trading horizon Koc Holding AS is expected to generate 0.71 times more return on investment than Yapi Ve. However, Koc Holding AS is 1.4 times less risky than Yapi Ve. It trades about 0.4 of its potential returns per unit of risk. Yapi ve Kredi is currently generating about 0.14 per unit of risk. If you would invest  20,891  in Koc Holding AS on February 16, 2024 and sell it today you would earn a total of  3,159  from holding Koc Holding AS or generate 15.12% return on investment over 90 days.

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

Koc Holding AS  vs.  Yapi ve Kredi

Koc Holding AS

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Koc Holding AS are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, Koc Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Yapi ve Kredi

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yapi ve Kredi are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward-looking signals, Yapi Ve demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Koc Holding and Yapi Ve

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

The idea behind Koc Holding AS and Yapi ve Kredi 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.