Correlation Between MEGA METAL and Kardemir Karabuk
Can any of the company-specific risk be diversified away by investing in both MEGA METAL and Kardemir Karabuk 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 Kardemir Karabuk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEGA METAL and Kardemir Karabuk Demir, you can compare the effects of market volatilities on MEGA METAL and Kardemir Karabuk 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 Kardemir Karabuk. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEGA METAL and Kardemir Karabuk.
Diversification Opportunities for MEGA METAL and Kardemir Karabuk
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MEGA and Kardemir is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and Kardemir Karabuk Demir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardemir Karabuk Demir 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 Kardemir Karabuk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardemir Karabuk Demir has no effect on the direction of MEGA METAL i.e., MEGA METAL and Kardemir Karabuk go up and down completely randomly.
Pair Corralation between MEGA METAL and Kardemir Karabuk
Assuming the 90 days trading horizon MEGA METAL is expected to under-perform the Kardemir Karabuk. But the stock apears to be less risky and, when comparing its historical volatility, MEGA METAL is 1.39 times less risky than Kardemir Karabuk. The stock trades about -0.03 of its potential returns per unit of risk. The Kardemir Karabuk Demir is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,452 in Kardemir Karabuk Demir on August 28, 2024 and sell it today you would earn a total of 288.00 from holding Kardemir Karabuk Demir or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEGA METAL vs. Kardemir Karabuk Demir
Performance |
| Timeline |
| MEGA METAL |
| Kardemir Karabuk Demir |
MEGA METAL and Kardemir Karabuk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEGA METAL and Kardemir Karabuk
The main advantage of trading using opposite MEGA METAL and Kardemir Karabuk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEGA METAL position performs unexpectedly, Kardemir Karabuk 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 Kardemir Karabuk will offset losses from the drop in Kardemir Karabuk's long position.| MEGA METAL vs. Koza Anadolu Metal | MEGA METAL vs. Sekerbank TAS | MEGA METAL vs. Cuhadaroglu Metal Sanayi | MEGA METAL vs. Bms Birlesik Metal |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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