Correlation Between Borlease Otomotiv and Sanica Isi

Can any of the company-specific risk be diversified away by investing in both Borlease Otomotiv and Sanica Isi 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 Borlease Otomotiv and Sanica Isi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Borlease Otomotiv AS and Sanica Isi Sanayi, you can compare the effects of market volatilities on Borlease Otomotiv and Sanica Isi 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 Borlease Otomotiv with a short position of Sanica Isi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borlease Otomotiv and Sanica Isi.

Diversification Opportunities for Borlease Otomotiv and Sanica Isi

0.13

Correlation Coefficient

Borlease Otomotiv  Sanica Isi

Average diversification

The 3 months correlation between Borlease and Sanica is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Borlease Otomotiv AS and Sanica Isi Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanica Isi Sanayi and Borlease Otomotiv 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 Borlease Otomotiv AS are associated (or correlated) with Sanica Isi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanica Isi Sanayi has no effect on the direction of Borlease Otomotiv i.e., Borlease Otomotiv and Sanica Isi go up and down completely randomly.

Pair Corralation between Borlease Otomotiv and Sanica Isi

Assuming the 90 days trading horizon Borlease Otomotiv is expected to generate 3.72 times less return on investment than Sanica Isi. But when comparing it to its historical volatility, Borlease Otomotiv AS is 4.98 times less risky than Sanica Isi. It trades about 0.06 of its potential returns per unit of risk. Sanica Isi Sanayi is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  496.00  in Sanica Isi Sanayi on April 7, 2024 and sell it today you would earn a total of  264.00  from holding Sanica Isi Sanayi or generate 53.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	44.28%
Values	Daily Returns

Borlease Otomotiv AS  vs.  Sanica Isi Sanayi

Borlease Otomotiv

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Borlease Otomotiv demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Sanica Isi Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sanica Isi Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Sanica Isi is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Borlease Otomotiv and Sanica Isi

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

The idea behind Borlease Otomotiv AS and Sanica Isi 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..