Correlation Between Seyitler Kimya and Lokman Hekim

Can any of the company-specific risk be diversified away by investing in both Seyitler Kimya and Lokman Hekim 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 Seyitler Kimya and Lokman Hekim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seyitler Kimya Sanayi and Lokman Hekim Engurusag, you can compare the effects of market volatilities on Seyitler Kimya and Lokman Hekim 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 Seyitler Kimya with a short position of Lokman Hekim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seyitler Kimya and Lokman Hekim.

Diversification Opportunities for Seyitler Kimya and Lokman Hekim

0.81

Correlation Coefficient

Seyitler Kimya  Lokman Hekim

Very poor diversification

The 3 months correlation between Seyitler and Lokman is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Seyitler Kimya Sanayi and Lokman Hekim Engurusag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lokman Hekim Engurusag and Seyitler Kimya 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 Seyitler Kimya Sanayi are associated (or correlated) with Lokman Hekim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lokman Hekim Engurusag has no effect on the direction of Seyitler Kimya i.e., Seyitler Kimya and Lokman Hekim go up and down completely randomly.

Pair Corralation between Seyitler Kimya and Lokman Hekim

Assuming the 90 days trading horizon Seyitler Kimya Sanayi is expected to generate 2.43 times more return on investment than Lokman Hekim. However, Seyitler Kimya is 2.43 times more volatile than Lokman Hekim Engurusag. It trades about 0.3 of its potential returns per unit of risk. Lokman Hekim Engurusag is currently generating about 0.38 per unit of risk. If you would invest  684.00  in Seyitler Kimya Sanayi on February 13, 2024 and sell it today you would earn a total of  236.00  from holding Seyitler Kimya Sanayi or generate 34.5% return on investment over 90 days.

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

Seyitler Kimya Sanayi  vs.  Lokman Hekim Engurusag

Seyitler Kimya Sanayi

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seyitler Kimya Sanayi are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, Seyitler Kimya demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Lokman Hekim Engurusag

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lokman Hekim Engurusag are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Lokman Hekim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seyitler Kimya and Lokman Hekim

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

The idea behind Seyitler Kimya Sanayi and Lokman Hekim Engurusag 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.