Correlation Between Albaraka Turk and SASA Polyester

Can any of the company-specific risk be diversified away by investing in both Albaraka Turk and SASA Polyester 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 Albaraka Turk and SASA Polyester into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Albaraka Turk Katilim and SASA Polyester Sanayi, you can compare the effects of market volatilities on Albaraka Turk and SASA Polyester 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 Albaraka Turk with a short position of SASA Polyester. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albaraka Turk and SASA Polyester.

Diversification Opportunities for Albaraka Turk and SASA Polyester

0.8

Correlation Coefficient

Albaraka Turk  SASA Polyester

Very poor diversification

The 3 months correlation between Albaraka and SASA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Albaraka Turk Katilim and SASA Polyester Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SASA Polyester Sanayi and Albaraka 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 Albaraka Turk Katilim are associated (or correlated) with SASA Polyester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SASA Polyester Sanayi has no effect on the direction of Albaraka Turk i.e., Albaraka Turk and SASA Polyester go up and down completely randomly.

Pair Corralation between Albaraka Turk and SASA Polyester

Assuming the 90 days trading horizon Albaraka Turk Katilim is expected to generate 1.03 times more return on investment than SASA Polyester. However, Albaraka Turk is 1.03 times more volatile than SASA Polyester Sanayi. It trades about 0.18 of its potential returns per unit of risk. SASA Polyester Sanayi is currently generating about 0.06 per unit of risk. If you would invest  416.00  in Albaraka Turk Katilim on March 31, 2024 and sell it today you would earn a total of  136.00  from holding Albaraka Turk Katilim or generate 32.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.28%
Values	Daily Returns

Albaraka Turk Katilim  vs.  SASA Polyester Sanayi

Albaraka Turk Katilim

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Albaraka Turk Katilim are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward-looking signals, Albaraka Turk demonstrated solid returns over the last few months and may actually be approaching a breakup point.

SASA Polyester Sanayi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SASA Polyester Sanayi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, SASA Polyester may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Albaraka Turk and SASA Polyester

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

The idea behind Albaraka Turk Katilim and SASA Polyester Sanayi 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.