Correlation Between Vestel Elektronik and Petkim Petrokimya
Can any of the company-specific risk be diversified away by investing in both Vestel Elektronik and Petkim Petrokimya 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 Vestel Elektronik and Petkim Petrokimya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestel Elektronik Sanayi and Petkim Petrokimya Holding, you can compare the effects of market volatilities on Vestel Elektronik and Petkim Petrokimya 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 Vestel Elektronik with a short position of Petkim Petrokimya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestel Elektronik and Petkim Petrokimya.
Diversification Opportunities for Vestel Elektronik and Petkim Petrokimya
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vestel and Petkim is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Vestel Elektronik Sanayi and Petkim Petrokimya Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petkim Petrokimya Holding and Vestel Elektronik 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 Vestel Elektronik Sanayi are associated (or correlated) with Petkim Petrokimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petkim Petrokimya Holding has no effect on the direction of Vestel Elektronik i.e., Vestel Elektronik and Petkim Petrokimya go up and down completely randomly.
Pair Corralation between Vestel Elektronik and Petkim Petrokimya
Assuming the 90 days trading horizon Vestel Elektronik Sanayi is expected to generate 1.23 times more return on investment than Petkim Petrokimya. However, Vestel Elektronik is 1.23 times more volatile than Petkim Petrokimya Holding. It trades about 0.13 of its potential returns per unit of risk. Petkim Petrokimya Holding is currently generating about -0.06 per unit of risk. If you would invest 5,825 in Vestel Elektronik Sanayi on August 29, 2024 and sell it today you would earn a total of 395.00 from holding Vestel Elektronik Sanayi or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestel Elektronik Sanayi vs. Petkim Petrokimya Holding
Performance |
| Timeline |
| Vestel Elektronik Sanayi |
| Petkim Petrokimya Holding |
Vestel Elektronik and Petkim Petrokimya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestel Elektronik and Petkim Petrokimya
The main advantage of trading using opposite Vestel Elektronik and Petkim Petrokimya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestel Elektronik position performs unexpectedly, Petkim Petrokimya 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 Petkim Petrokimya will offset losses from the drop in Petkim Petrokimya's long position.| Vestel Elektronik vs. Qnb Finansbank AS | Vestel Elektronik vs. Kent Gida Maddeleri | Vestel Elektronik vs. QNB Finans Finansal | Vestel Elektronik vs. Turkiye Kalkinma Bankasi |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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