Correlation Between Politeknik Metal and Ekiz Kimya
Can any of the company-specific risk be diversified away by investing in both Politeknik Metal and Ekiz Kimya 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 Ekiz Kimya 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 Ekiz Kimya Sanayi, you can compare the effects of market volatilities on Politeknik Metal and Ekiz Kimya 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 Ekiz Kimya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Politeknik Metal and Ekiz Kimya.
Diversification Opportunities for Politeknik Metal and Ekiz Kimya
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Politeknik and Ekiz is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Ekiz Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekiz Kimya Sanayi 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 Ekiz Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekiz Kimya Sanayi has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Ekiz Kimya go up and down completely randomly.
Pair Corralation between Politeknik Metal and Ekiz Kimya
Assuming the 90 days trading horizon Politeknik Metal Sanayi is expected to generate 1.42 times more return on investment than Ekiz Kimya. However, Politeknik Metal is 1.42 times more volatile than Ekiz Kimya Sanayi. It trades about 0.21 of its potential returns per unit of risk. Ekiz Kimya Sanayi is currently generating about -0.05 per unit of risk. If you would invest 615,250 in Politeknik Metal Sanayi on September 5, 2024 and sell it today you would earn a total of 102,250 from holding Politeknik Metal Sanayi or generate 16.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Politeknik Metal Sanayi vs. Ekiz Kimya Sanayi
Performance |
| Timeline |
| Politeknik Metal Sanayi |
| Ekiz Kimya Sanayi |
Politeknik Metal and Ekiz Kimya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Politeknik Metal and Ekiz Kimya
The main advantage of trading using opposite Politeknik Metal and Ekiz Kimya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Politeknik Metal position performs unexpectedly, Ekiz Kimya 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 Ekiz Kimya will offset losses from the drop in Ekiz Kimya's long position.| Politeknik Metal vs. Bms Birlesik Metal | Politeknik Metal vs. E Data Teknoloji Pazarlama | Politeknik Metal vs. Akbank TAS | Politeknik Metal vs. Cuhadaroglu Metal Sanayi |
| Ekiz Kimya vs. Politeknik Metal Sanayi | Ekiz Kimya vs. Creditwest Faktoring AS | Ekiz Kimya vs. Turkiye Kalkinma Bankasi | Ekiz Kimya vs. MEGA METAL |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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