Correlation Between Ford Otomotiv and Politeknik Metal
Can any of the company-specific risk be diversified away by investing in both Ford Otomotiv and Politeknik Metal 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 Ford Otomotiv and Politeknik Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Otomotiv Sanayi and Politeknik Metal Sanayi, you can compare the effects of market volatilities on Ford Otomotiv and Politeknik Metal 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 Ford Otomotiv with a short position of Politeknik Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford Otomotiv and Politeknik Metal.
Diversification Opportunities for Ford Otomotiv and Politeknik Metal
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Politeknik is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ford Otomotiv Sanayi and Politeknik Metal Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Politeknik Metal Sanayi and Ford Otomotiv 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 Ford Otomotiv Sanayi are associated (or correlated) with Politeknik Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Politeknik Metal Sanayi has no effect on the direction of Ford Otomotiv i.e., Ford Otomotiv and Politeknik Metal go up and down completely randomly.
Pair Corralation between Ford Otomotiv and Politeknik Metal
Assuming the 90 days trading horizon Ford Otomotiv is expected to generate 15.33 times less return on investment than Politeknik Metal. But when comparing it to its historical volatility, Ford Otomotiv Sanayi is 1.49 times less risky than Politeknik Metal. It trades about 0.02 of its potential returns per unit of risk. Politeknik Metal Sanayi is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 650,750 in Politeknik Metal Sanayi on September 1, 2024 and sell it today you would earn a total of 83,500 from holding Politeknik Metal Sanayi or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Otomotiv Sanayi vs. Politeknik Metal Sanayi
Performance |
| Timeline |
| Ford Otomotiv Sanayi |
| Politeknik Metal Sanayi |
Ford Otomotiv and Politeknik Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford Otomotiv and Politeknik Metal
The main advantage of trading using opposite Ford Otomotiv and Politeknik Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford Otomotiv position performs unexpectedly, Politeknik Metal 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 Politeknik Metal will offset losses from the drop in Politeknik Metal's long position.| Ford Otomotiv vs. Eregli Demir ve | Ford Otomotiv vs. Tofas Turk Otomobil | Ford Otomotiv vs. Turkiye Petrol Rafinerileri | Ford Otomotiv vs. Turkiye Sise ve |
| Politeknik Metal vs. Cuhadaroglu Metal Sanayi | Politeknik Metal vs. Creditwest Faktoring AS | Politeknik Metal vs. Galatasaray Sportif Sinai | Politeknik Metal vs. Koza Anadolu Metal |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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