Correlation Between Galata Wind and Petrokent Turizm
Can any of the company-specific risk be diversified away by investing in both Galata Wind and Petrokent Turizm 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 Galata Wind and Petrokent Turizm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galata Wind Enerji and Petrokent Turizm AS, you can compare the effects of market volatilities on Galata Wind and Petrokent Turizm 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 Galata Wind with a short position of Petrokent Turizm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galata Wind and Petrokent Turizm.
Diversification Opportunities for Galata Wind and Petrokent Turizm
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galata and Petrokent is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Galata Wind Enerji and Petrokent Turizm AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrokent Turizm and Galata Wind 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 Galata Wind Enerji are associated (or correlated) with Petrokent Turizm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrokent Turizm has no effect on the direction of Galata Wind i.e., Galata Wind and Petrokent Turizm go up and down completely randomly.
Pair Corralation between Galata Wind and Petrokent Turizm
Assuming the 90 days trading horizon Galata Wind Enerji is expected to under-perform the Petrokent Turizm. In addition to that, Galata Wind is 1.04 times more volatile than Petrokent Turizm AS. It trades about -0.2 of its total potential returns per unit of risk. Petrokent Turizm AS is currently generating about -0.2 per unit of volatility. If you would invest 26,400 in Petrokent Turizm AS on November 2, 2024 and sell it today you would lose (2,200) from holding Petrokent Turizm AS or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Galata Wind Enerji vs. Petrokent Turizm AS
Performance |
| Timeline |
| Galata Wind Enerji |
| Petrokent Turizm |
Galata Wind and Petrokent Turizm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galata Wind and Petrokent Turizm
The main advantage of trading using opposite Galata Wind and Petrokent Turizm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galata Wind position performs unexpectedly, Petrokent Turizm 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 Petrokent Turizm will offset losses from the drop in Petrokent Turizm's long position.| Galata Wind vs. Cuhadaroglu Metal Sanayi | Galata Wind vs. Koza Anadolu Metal | Galata Wind vs. MEGA METAL | Galata Wind vs. Sekerbank TAS |
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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.
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