Correlation Between Politeknik Metal and Kafein Yazilim
Can any of the company-specific risk be diversified away by investing in both Politeknik Metal and Kafein Yazilim 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 Kafein Yazilim 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 Kafein Yazilim, you can compare the effects of market volatilities on Politeknik Metal and Kafein Yazilim 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 Kafein Yazilim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Politeknik Metal and Kafein Yazilim.
Diversification Opportunities for Politeknik Metal and Kafein Yazilim
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Politeknik and Kafein is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Kafein Yazilim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kafein Yazilim 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 Kafein Yazilim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kafein Yazilim has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Kafein Yazilim go up and down completely randomly.
Pair Corralation between Politeknik Metal and Kafein Yazilim
Assuming the 90 days trading horizon Politeknik Metal Sanayi is expected to generate 0.8 times more return on investment than Kafein Yazilim. However, Politeknik Metal Sanayi is 1.25 times less risky than Kafein Yazilim. It trades about -0.01 of its potential returns per unit of risk. Kafein Yazilim is currently generating about -0.07 per unit of risk. If you would invest 765,500 in Politeknik Metal Sanayi on September 3, 2024 and sell it today you would lose (31,250) from holding Politeknik Metal Sanayi or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Politeknik Metal Sanayi vs. Kafein Yazilim
Performance |
| Timeline |
| Politeknik Metal Sanayi |
| Kafein Yazilim |
Politeknik Metal and Kafein Yazilim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Politeknik Metal and Kafein Yazilim
The main advantage of trading using opposite Politeknik Metal and Kafein Yazilim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Politeknik Metal position performs unexpectedly, Kafein Yazilim 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 Kafein Yazilim will offset losses from the drop in Kafein Yazilim's long position.| Politeknik Metal vs. Akcansa Cimento Sanayi | Politeknik Metal vs. Trabzonspor Sportif Yatirim | Politeknik Metal vs. Bms Birlesik Metal | Politeknik Metal vs. Koza Anadolu Metal |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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