Correlation Between Celik Halat and Karsan Otomotiv

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

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

Diversification Opportunities for Celik Halat and Karsan Otomotiv

0.87

Correlation Coefficient

Celik Halat  Karsan Otomotiv

Very poor diversification

The 3 months correlation between Celik and Karsan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Celik Halat ve and Karsan Otomotiv Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karsan Otomotiv Sanayi and Celik Halat 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 Celik Halat ve are associated (or correlated) with Karsan Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karsan Otomotiv Sanayi has no effect on the direction of Celik Halat i.e., Celik Halat and Karsan Otomotiv go up and down completely randomly.

Pair Corralation between Celik Halat and Karsan Otomotiv

Assuming the 90 days trading horizon Celik Halat ve is expected to under-perform the Karsan Otomotiv. In addition to that, Celik Halat is 2.53 times more volatile than Karsan Otomotiv Sanayi. It trades about -0.05 of its total potential returns per unit of risk. Karsan Otomotiv Sanayi is currently generating about -0.12 per unit of volatility. If you would invest  1,291  in Karsan Otomotiv Sanayi on September 23, 2024 and sell it today you would lose (38.00) from holding Karsan Otomotiv Sanayi or give up 2.94% of portfolio value over 90 days.

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

Celik Halat ve  vs.  Karsan Otomotiv Sanayi

Celik Halat ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celik Halat ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Karsan Otomotiv Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Karsan Otomotiv Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Celik Halat and Karsan Otomotiv

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

The idea behind Celik Halat ve and Karsan Otomotiv 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.