Correlation Between Politeknik Metal and MEGA METAL
Can any of the company-specific risk be diversified away by investing in both Politeknik Metal and MEGA METAL 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 MEGA METAL 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 MEGA METAL, you can compare the effects of market volatilities on Politeknik Metal and MEGA METAL 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 MEGA METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Politeknik Metal and MEGA METAL.
Diversification Opportunities for Politeknik Metal and MEGA METAL
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Politeknik and MEGA is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and MEGA METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEGA METAL 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 MEGA METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEGA METAL has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and MEGA METAL go up and down completely randomly.
Pair Corralation between Politeknik Metal and MEGA METAL
Assuming the 90 days trading horizon Politeknik Metal Sanayi is expected to generate 1.01 times more return on investment than MEGA METAL. However, Politeknik Metal is 1.01 times more volatile than MEGA METAL. It trades about 0.09 of its potential returns per unit of risk. MEGA METAL is currently generating about 0.02 per unit of risk. If you would invest 261,964 in Politeknik Metal Sanayi on August 28, 2024 and sell it today you would earn a total of 455,786 from holding Politeknik Metal Sanayi or generate 173.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 67.05% |
| Values | Daily Returns |
Politeknik Metal Sanayi vs. MEGA METAL
Performance |
| Timeline |
| Politeknik Metal Sanayi |
| MEGA METAL |
Politeknik Metal and MEGA METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Politeknik Metal and MEGA METAL
The main advantage of trading using opposite Politeknik Metal and MEGA METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Politeknik Metal position performs unexpectedly, MEGA METAL 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 MEGA METAL will offset losses from the drop in MEGA METAL's long position.| Politeknik Metal vs. MEGA METAL | Politeknik Metal vs. Sekerbank TAS | Politeknik Metal vs. Cuhadaroglu Metal Sanayi | Politeknik Metal vs. Datagate Bilgisayar Malzemeleri |
| MEGA METAL vs. Turkish Airlines | MEGA METAL vs. Koc Holding AS | MEGA METAL vs. Ford Otomotiv Sanayi | MEGA METAL vs. Turkiye Petrol Rafinerileri |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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