Correlation Between MEGA METAL and Politeknik Metal
Can any of the company-specific risk be diversified away by investing in both MEGA METAL 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 MEGA METAL and Politeknik Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEGA METAL and Politeknik Metal Sanayi, you can compare the effects of market volatilities on MEGA METAL 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 MEGA METAL with a short position of Politeknik Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEGA METAL and Politeknik Metal.
Diversification Opportunities for MEGA METAL and Politeknik Metal
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between MEGA and Politeknik is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL 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 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 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 MEGA METAL i.e., MEGA METAL and Politeknik Metal go up and down completely randomly.
Pair Corralation between MEGA METAL and Politeknik Metal
Assuming the 90 days trading horizon MEGA METAL is expected to under-perform the Politeknik Metal. But the stock apears to be less risky and, when comparing its historical volatility, MEGA METAL is 1.48 times less risky than Politeknik Metal. The stock trades about -0.13 of its potential returns per unit of risk. The Politeknik Metal Sanayi is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 765,500 in Politeknik Metal Sanayi on November 2, 2024 and sell it today you would lose (24,750) from holding Politeknik Metal Sanayi or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEGA METAL vs. Politeknik Metal Sanayi
Performance |
| Timeline |
| MEGA METAL |
| Politeknik Metal Sanayi |
MEGA METAL and Politeknik Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEGA METAL and Politeknik Metal
The main advantage of trading using opposite MEGA METAL and Politeknik Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEGA METAL 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.| MEGA METAL vs. Koza Anadolu Metal | MEGA METAL vs. Akcansa Cimento Sanayi | MEGA METAL vs. Politeknik Metal Sanayi | MEGA METAL vs. Bms Birlesik Metal |
| Politeknik Metal vs. Bms Birlesik Metal | Politeknik Metal vs. MEGA METAL | Politeknik Metal vs. Koza Anadolu Metal | Politeknik Metal vs. Cuhadaroglu Metal 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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