Correlation Between Petkim Petrokimya and Eregli Demir
Can any of the company-specific risk be diversified away by investing in both Petkim Petrokimya and Eregli Demir 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 Petkim Petrokimya and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petkim Petrokimya Holding and Eregli Demir ve, you can compare the effects of market volatilities on Petkim Petrokimya and Eregli Demir 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 Petkim Petrokimya with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petkim Petrokimya and Eregli Demir.
Diversification Opportunities for Petkim Petrokimya and Eregli Demir
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petkim and Eregli is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and Petkim Petrokimya 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 Petkim Petrokimya Holding are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Petkim Petrokimya i.e., Petkim Petrokimya and Eregli Demir go up and down completely randomly.
Pair Corralation between Petkim Petrokimya and Eregli Demir
Assuming the 90 days trading horizon Petkim Petrokimya Holding is expected to under-perform the Eregli Demir. In addition to that, Petkim Petrokimya is 1.18 times more volatile than Eregli Demir ve. It trades about -0.04 of its total potential returns per unit of risk. Eregli Demir ve is currently generating about 0.17 per unit of volatility. If you would invest 4,786 in Eregli Demir ve on August 28, 2024 and sell it today you would earn a total of 284.00 from holding Eregli Demir ve or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petkim Petrokimya Holding vs. Eregli Demir ve
Performance |
| Timeline |
| Petkim Petrokimya Holding |
| Eregli Demir ve |
Petkim Petrokimya and Eregli Demir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petkim Petrokimya and Eregli Demir
The main advantage of trading using opposite Petkim Petrokimya and Eregli Demir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petkim Petrokimya position performs unexpectedly, Eregli Demir 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 Eregli Demir will offset losses from the drop in Eregli Demir's long position.| Petkim Petrokimya vs. Qnb Finansbank AS | Petkim Petrokimya vs. QNB Finans Finansal | Petkim Petrokimya vs. Turkiye Kalkinma Bankasi | Petkim Petrokimya vs. Kocaer Celik Sanayi |
| Eregli Demir vs. Qnb Finansbank AS | Eregli Demir vs. QNB Finans Finansal | Eregli Demir vs. Turkiye Kalkinma Bankasi | Eregli Demir vs. Kocaer Celik 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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