Correlation Between MEGA METAL and Ekiz Kimya
Can any of the company-specific risk be diversified away by investing in both MEGA METAL and Ekiz Kimya 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 MEGA METAL and Ekiz Kimya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEGA METAL and Ekiz Kimya Sanayi, you can compare the effects of market volatilities on MEGA METAL and Ekiz Kimya 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 MEGA METAL with a short position of Ekiz Kimya. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEGA METAL and Ekiz Kimya.
Diversification Opportunities for MEGA METAL and Ekiz Kimya
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MEGA and Ekiz is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and Ekiz Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekiz Kimya Sanayi and MEGA METAL 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 MEGA METAL are associated (or correlated) with Ekiz Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekiz Kimya Sanayi has no effect on the direction of MEGA METAL i.e., MEGA METAL and Ekiz Kimya go up and down completely randomly.
Pair Corralation between MEGA METAL and Ekiz Kimya
Assuming the 90 days trading horizon MEGA METAL is expected to generate 0.85 times more return on investment than Ekiz Kimya. However, MEGA METAL is 1.17 times less risky than Ekiz Kimya. It trades about 0.0 of its potential returns per unit of risk. Ekiz Kimya Sanayi is currently generating about -0.02 per unit of risk. If you would invest 3,312 in MEGA METAL on September 3, 2024 and sell it today you would lose (208.00) from holding MEGA METAL or give up 6.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEGA METAL vs. Ekiz Kimya Sanayi
Performance |
| Timeline |
| MEGA METAL |
| Ekiz Kimya Sanayi |
MEGA METAL and Ekiz Kimya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEGA METAL and Ekiz Kimya
The main advantage of trading using opposite MEGA METAL and Ekiz Kimya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEGA METAL position performs unexpectedly, Ekiz Kimya 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 Ekiz Kimya will offset losses from the drop in Ekiz Kimya's long position.| MEGA METAL vs. Politeknik Metal Sanayi | MEGA METAL vs. Silverline Endustri ve | MEGA METAL vs. Akbank TAS | MEGA METAL vs. ICBC Turkey Bank |
| Ekiz Kimya vs. MEGA METAL | Ekiz Kimya vs. Galatasaray Sportif Sinai | Ekiz Kimya vs. Koza Anadolu Metal | Ekiz Kimya vs. Akcansa Cimento 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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