Correlation Between Alarko Carrier and Celik Halat

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

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

Diversification Opportunities for Alarko Carrier and Celik Halat

0.72

Correlation Coefficient

Alarko Carrier  Celik Halat

Poor diversification

The 3 months correlation between Alarko and Celik is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alarko Carrier Sanayi and Celik Halat ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celik Halat ve and Alarko Carrier 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 Alarko Carrier Sanayi are associated (or correlated) with Celik Halat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celik Halat ve has no effect on the direction of Alarko Carrier i.e., Alarko Carrier and Celik Halat go up and down completely randomly.

Pair Corralation between Alarko Carrier and Celik Halat

Assuming the 90 days trading horizon Alarko Carrier is expected to generate 1.45 times less return on investment than Celik Halat. In addition to that, Alarko Carrier is 1.11 times more volatile than Celik Halat ve. It trades about 0.07 of its total potential returns per unit of risk. Celik Halat ve is currently generating about 0.11 per unit of volatility. If you would invest  2,257  in Celik Halat ve on February 1, 2024 and sell it today you would earn a total of  1,073  from holding Celik Halat ve or generate 47.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.19%
Values	Daily Returns

Alarko Carrier Sanayi  vs.  Celik Halat ve

Alarko Carrier Sanayi

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alarko Carrier Sanayi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Alarko Carrier demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Celik Halat ve

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Celik Halat ve are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Celik Halat demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alarko Carrier and Celik Halat

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

The idea behind Alarko Carrier Sanayi and Celik Halat ve 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.