Correlation Between Sok Marketler and Migros Ticaret

Can any of the company-specific risk be diversified away by investing in both Sok Marketler and Migros Ticaret 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 Sok Marketler and Migros Ticaret into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sok Marketler Ticaret and Migros Ticaret AS, you can compare the effects of market volatilities on Sok Marketler and Migros Ticaret 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 Sok Marketler with a short position of Migros Ticaret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sok Marketler and Migros Ticaret.

Diversification Opportunities for Sok Marketler and Migros Ticaret

0.42

Correlation Coefficient

Sok Marketler  Migros Ticaret

Very weak diversification

The 3 months correlation between Sok and Migros is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sok Marketler Ticaret and Migros Ticaret AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migros Ticaret AS and Sok Marketler 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 Sok Marketler Ticaret are associated (or correlated) with Migros Ticaret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Migros Ticaret AS has no effect on the direction of Sok Marketler i.e., Sok Marketler and Migros Ticaret go up and down completely randomly.

Pair Corralation between Sok Marketler and Migros Ticaret

Assuming the 90 days trading horizon Sok Marketler Ticaret is expected to under-perform the Migros Ticaret. But the stock apears to be less risky and, when comparing its historical volatility, Sok Marketler Ticaret is 1.04 times less risky than Migros Ticaret. The stock trades about -0.05 of its potential returns per unit of risk. The Migros Ticaret AS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  48,199  in Migros Ticaret AS on March 19, 2024 and sell it today you would earn a total of  3,401  from holding Migros Ticaret AS or generate 7.06% return on investment over 90 days.

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

Sok Marketler Ticaret  vs.  Migros Ticaret AS

Sok Marketler Ticaret

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sok Marketler Ticaret are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sok Marketler is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Migros Ticaret AS

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Sok Marketler and Migros Ticaret

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

The idea behind Sok Marketler Ticaret and Migros Ticaret 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.