Correlation Between Politeknik Metal and Sekerbank TAS
Can any of the company-specific risk be diversified away by investing in both Politeknik Metal and Sekerbank TAS 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 Sekerbank TAS 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 Sekerbank TAS, you can compare the effects of market volatilities on Politeknik Metal and Sekerbank TAS 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 Sekerbank TAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Politeknik Metal and Sekerbank TAS.
Diversification Opportunities for Politeknik Metal and Sekerbank TAS
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Politeknik and Sekerbank is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Sekerbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekerbank TAS 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 Sekerbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekerbank TAS has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Sekerbank TAS go up and down completely randomly.
Pair Corralation between Politeknik Metal and Sekerbank TAS
Assuming the 90 days trading horizon Politeknik Metal Sanayi is expected to generate 0.97 times more return on investment than Sekerbank TAS. However, Politeknik Metal Sanayi is 1.03 times less risky than Sekerbank TAS. It trades about 0.01 of its potential returns per unit of risk. Sekerbank TAS is currently generating about -0.06 per unit of risk. If you would invest 683,000 in Politeknik Metal Sanayi on October 20, 2024 and sell it today you would lose (250.00) from holding Politeknik Metal Sanayi or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Politeknik Metal Sanayi vs. Sekerbank TAS
Performance |
| Timeline |
| Politeknik Metal Sanayi |
| Sekerbank TAS |
Politeknik Metal and Sekerbank TAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Politeknik Metal and Sekerbank TAS
The main advantage of trading using opposite Politeknik Metal and Sekerbank TAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Politeknik Metal position performs unexpectedly, Sekerbank TAS 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 Sekerbank TAS will offset losses from the drop in Sekerbank TAS's long position.| Politeknik Metal vs. Turkiye Garanti Bankasi | Politeknik Metal vs. Yapi ve Kredi | Politeknik Metal vs. Turkiye Is Bankasi | Politeknik Metal vs. Turkiye Is Bankasi |
| Sekerbank TAS vs. Turkiye Sinai Kalkinma | Sekerbank TAS vs. Yapi ve Kredi | Sekerbank TAS vs. Kardemir Karabuk Demir | Sekerbank TAS vs. Turkiye Is Bankasi |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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