Correlation Between MEGA METAL and Papilon Savunma
Can any of the company-specific risk be diversified away by investing in both MEGA METAL and Papilon Savunma 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 Papilon Savunma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEGA METAL and Papilon Savunma Guvenlik, you can compare the effects of market volatilities on MEGA METAL and Papilon Savunma 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 Papilon Savunma. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEGA METAL and Papilon Savunma.
Diversification Opportunities for MEGA METAL and Papilon Savunma
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MEGA and Papilon is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and Papilon Savunma Guvenlik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papilon Savunma Guvenlik 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 Papilon Savunma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papilon Savunma Guvenlik has no effect on the direction of MEGA METAL i.e., MEGA METAL and Papilon Savunma go up and down completely randomly.
Pair Corralation between MEGA METAL and Papilon Savunma
Assuming the 90 days trading horizon MEGA METAL is expected to under-perform the Papilon Savunma. But the stock apears to be less risky and, when comparing its historical volatility, MEGA METAL is 1.36 times less risky than Papilon Savunma. The stock trades about -0.39 of its potential returns per unit of risk. The Papilon Savunma Guvenlik is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,334 in Papilon Savunma Guvenlik on October 17, 2024 and sell it today you would lose (56.00) from holding Papilon Savunma Guvenlik or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEGA METAL vs. Papilon Savunma Guvenlik
Performance |
| Timeline |
| MEGA METAL |
| Papilon Savunma Guvenlik |
MEGA METAL and Papilon Savunma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEGA METAL and Papilon Savunma
The main advantage of trading using opposite MEGA METAL and Papilon Savunma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEGA METAL position performs unexpectedly, Papilon Savunma 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 Papilon Savunma will offset losses from the drop in Papilon Savunma's long position.| MEGA METAL vs. Bms Birlesik Metal | MEGA METAL vs. Politeknik Metal Sanayi | MEGA METAL vs. Cuhadaroglu Metal Sanayi | MEGA METAL vs. Creditwest Faktoring AS |
| Papilon Savunma vs. Politeknik Metal Sanayi | Papilon Savunma vs. MEGA METAL | Papilon Savunma vs. Cuhadaroglu Metal Sanayi | Papilon Savunma vs. Creditwest Faktoring AS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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