Correlation Between AG Anadolu and Koc Holding

Can any of the company-specific risk be diversified away by investing in both AG Anadolu and Koc Holding 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 AG Anadolu and Koc Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AG Anadolu Group and Koc Holding AS, you can compare the effects of market volatilities on AG Anadolu and Koc Holding 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 AG Anadolu with a short position of Koc Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Anadolu and Koc Holding.

Diversification Opportunities for AG Anadolu and Koc Holding

0.94

Correlation Coefficient

AG Anadolu  Koc Holding

Almost no diversification

The 3 months correlation between AGHOL and Koc is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding AG Anadolu Group and Koc Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koc Holding AS and AG Anadolu 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 AG Anadolu Group are associated (or correlated) with Koc Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koc Holding AS has no effect on the direction of AG Anadolu i.e., AG Anadolu and Koc Holding go up and down completely randomly.

Pair Corralation between AG Anadolu and Koc Holding

Assuming the 90 days trading horizon AG Anadolu is expected to generate 1.04 times less return on investment than Koc Holding. But when comparing it to its historical volatility, AG Anadolu Group is 1.09 times less risky than Koc Holding. It trades about 0.04 of its potential returns per unit of risk. Koc Holding AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  23,440  in Koc Holding AS on March 5, 2024 and sell it today you would earn a total of  380.00  from holding Koc Holding AS or generate 1.62% return on investment over 90 days.

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

AG Anadolu Group  vs.  Koc Holding AS

AG Anadolu Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AG Anadolu Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, AG Anadolu demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Koc Holding AS

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Koc Holding AS are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, Koc Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AG Anadolu and Koc Holding

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

The idea behind AG Anadolu Group and Koc Holding AS 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.