Correlation Between Eregli Demir and Petkim Petrokimya
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Petkim Petrokimya 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 Eregli Demir and Petkim Petrokimya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eregli Demir ve and Petkim Petrokimya Holding, you can compare the effects of market volatilities on Eregli Demir and Petkim Petrokimya 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 Eregli Demir with a short position of Petkim Petrokimya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Petkim Petrokimya.
Diversification Opportunities for Eregli Demir and Petkim Petrokimya
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eregli and Petkim is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Petkim Petrokimya Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petkim Petrokimya Holding and Eregli Demir 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 Eregli Demir ve are associated (or correlated) with Petkim Petrokimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petkim Petrokimya Holding has no effect on the direction of Eregli Demir i.e., Eregli Demir and Petkim Petrokimya go up and down completely randomly.
Pair Corralation between Eregli Demir and Petkim Petrokimya
Assuming the 90 days trading horizon Eregli Demir ve is expected to generate 0.85 times more return on investment than Petkim Petrokimya. However, Eregli Demir ve is 1.18 times less risky than Petkim Petrokimya. It trades about 0.17 of its potential returns per unit of risk. Petkim Petrokimya Holding is currently generating about -0.04 per unit of risk. If you would invest 4,786 in Eregli Demir ve on August 28, 2024 and sell it today you would earn a total of 284.00 from holding Eregli Demir ve or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eregli Demir ve vs. Petkim Petrokimya Holding
Performance |
| Timeline |
| Eregli Demir ve |
| Petkim Petrokimya Holding |
Eregli Demir and Petkim Petrokimya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eregli Demir and Petkim Petrokimya
The main advantage of trading using opposite Eregli Demir and Petkim Petrokimya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, Petkim Petrokimya 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 Petkim Petrokimya will offset losses from the drop in Petkim Petrokimya's long position.| Eregli Demir vs. Qnb Finansbank AS | Eregli Demir vs. QNB Finans Finansal | Eregli Demir vs. Turkiye Kalkinma Bankasi | Eregli Demir vs. Kocaer Celik Sanayi |
| Petkim Petrokimya vs. Qnb Finansbank AS | Petkim Petrokimya vs. QNB Finans Finansal | Petkim Petrokimya vs. Turkiye Kalkinma Bankasi | Petkim Petrokimya vs. Kocaer Celik Sanayi |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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