Correlation Between Petkim Petrokimya and Kardemir Karabuk
Can any of the company-specific risk be diversified away by investing in both Petkim Petrokimya 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 Petkim Petrokimya and Kardemir Karabuk 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 Kardemir Karabuk Demir, you can compare the effects of market volatilities on Petkim Petrokimya 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 Petkim Petrokimya with a short position of Kardemir Karabuk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petkim Petrokimya and Kardemir Karabuk.
Diversification Opportunities for Petkim Petrokimya and Kardemir Karabuk
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petkim and Kardemir is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding 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 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 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 Petkim Petrokimya i.e., Petkim Petrokimya and Kardemir Karabuk go up and down completely randomly.
Pair Corralation between Petkim Petrokimya and Kardemir Karabuk
Assuming the 90 days trading horizon Petkim Petrokimya Holding is expected to under-perform the Kardemir Karabuk. But the stock apears to be less risky and, when comparing its historical volatility, Petkim Petrokimya Holding is 1.14 times less risky than Kardemir Karabuk. The stock trades about -0.04 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 |
Petkim Petrokimya Holding vs. Kardemir Karabuk Demir
Performance |
| Timeline |
| Petkim Petrokimya Holding |
| Kardemir Karabuk Demir |
Petkim Petrokimya and Kardemir Karabuk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petkim Petrokimya and Kardemir Karabuk
The main advantage of trading using opposite Petkim Petrokimya and Kardemir Karabuk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petkim Petrokimya 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.| Petkim Petrokimya vs. Turkiye Petrol Rafinerileri | Petkim Petrokimya vs. Aselsan Elektronik Sanayi | Petkim Petrokimya vs. Eregli Demir ve | Petkim Petrokimya vs. Turkish Airlines |
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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