Correlation Between Politeknik Metal and Borlease Otomotiv
Can any of the company-specific risk be diversified away by investing in both Politeknik Metal and Borlease Otomotiv 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 Politeknik Metal and Borlease Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Politeknik Metal Sanayi and Borlease Otomotiv AS, you can compare the effects of market volatilities on Politeknik Metal and Borlease Otomotiv 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 Politeknik Metal with a short position of Borlease Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Politeknik Metal and Borlease Otomotiv.
Diversification Opportunities for Politeknik Metal and Borlease Otomotiv
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Politeknik and Borlease is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Borlease Otomotiv AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borlease Otomotiv and Politeknik 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 Politeknik Metal Sanayi are associated (or correlated) with Borlease Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borlease Otomotiv has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Borlease Otomotiv go up and down completely randomly.
Pair Corralation between Politeknik Metal and Borlease Otomotiv
Assuming the 90 days trading horizon Politeknik Metal is expected to generate 2.69 times less return on investment than Borlease Otomotiv. In addition to that, Politeknik Metal is 1.34 times more volatile than Borlease Otomotiv AS. It trades about 0.03 of its total potential returns per unit of risk. Borlease Otomotiv AS is currently generating about 0.12 per unit of volatility. If you would invest 6,725 in Borlease Otomotiv AS on October 24, 2024 and sell it today you would earn a total of 355.00 from holding Borlease Otomotiv AS or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Politeknik Metal Sanayi vs. Borlease Otomotiv AS
Performance |
| Timeline |
| Politeknik Metal Sanayi |
| Borlease Otomotiv |
Politeknik Metal and Borlease Otomotiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Politeknik Metal and Borlease Otomotiv
The main advantage of trading using opposite Politeknik Metal and Borlease Otomotiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Politeknik Metal position performs unexpectedly, Borlease Otomotiv 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 Borlease Otomotiv will offset losses from the drop in Borlease Otomotiv's long position.| Politeknik Metal vs. Qnb Finansbank AS | Politeknik Metal vs. Bms Birlesik Metal | Politeknik Metal vs. Trabzonspor Sportif Yatirim | Politeknik Metal vs. Gentas Genel Metal |
| Borlease Otomotiv vs. Akbank TAS | Borlease Otomotiv vs. MEGA METAL | Borlease Otomotiv vs. Cuhadaroglu Metal Sanayi | Borlease Otomotiv vs. Politeknik 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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