Correlation Between Petkim Petrokimya and Vestel Elektronik
Can any of the company-specific risk be diversified away by investing in both Petkim Petrokimya and Vestel Elektronik 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 Vestel Elektronik 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 Vestel Elektronik Sanayi, you can compare the effects of market volatilities on Petkim Petrokimya and Vestel Elektronik 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 Vestel Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petkim Petrokimya and Vestel Elektronik.
Diversification Opportunities for Petkim Petrokimya and Vestel Elektronik
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petkim and Vestel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding and Vestel Elektronik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestel Elektronik Sanayi 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 Vestel Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestel Elektronik Sanayi has no effect on the direction of Petkim Petrokimya i.e., Petkim Petrokimya and Vestel Elektronik go up and down completely randomly.
Pair Corralation between Petkim Petrokimya and Vestel Elektronik
Assuming the 90 days trading horizon Petkim Petrokimya Holding is expected to under-perform the Vestel Elektronik. But the stock apears to be less risky and, when comparing its historical volatility, Petkim Petrokimya Holding is 1.23 times less risky than Vestel Elektronik. The stock trades about -0.04 of its potential returns per unit of risk. The Vestel Elektronik Sanayi is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,850 in Vestel Elektronik Sanayi on August 25, 2024 and sell it today you would earn a total of 240.00 from holding Vestel Elektronik Sanayi or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petkim Petrokimya Holding vs. Vestel Elektronik Sanayi
Performance |
| Timeline |
| Petkim Petrokimya Holding |
| Vestel Elektronik Sanayi |
Petkim Petrokimya and Vestel Elektronik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petkim Petrokimya and Vestel Elektronik
The main advantage of trading using opposite Petkim Petrokimya and Vestel Elektronik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petkim Petrokimya position performs unexpectedly, Vestel Elektronik 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 Vestel Elektronik will offset losses from the drop in Vestel Elektronik'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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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