Correlation Between Alkim Kagit and Penguen Gida

Can any of the company-specific risk be diversified away by investing in both Alkim Kagit and Penguen Gida 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 Alkim Kagit and Penguen Gida into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alkim Kagit Sanayi and Penguen Gida Sanayi, you can compare the effects of market volatilities on Alkim Kagit and Penguen Gida 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 Alkim Kagit with a short position of Penguen Gida. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkim Kagit and Penguen Gida.

Diversification Opportunities for Alkim Kagit and Penguen Gida

-0.57

Correlation Coefficient

Alkim Kagit  Penguen Gida

Excellent diversification

The 3 months correlation between Alkim and Penguen is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alkim Kagit Sanayi and Penguen Gida Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penguen Gida Sanayi and Alkim Kagit 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 Alkim Kagit Sanayi are associated (or correlated) with Penguen Gida. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penguen Gida Sanayi has no effect on the direction of Alkim Kagit i.e., Alkim Kagit and Penguen Gida go up and down completely randomly.

Pair Corralation between Alkim Kagit and Penguen Gida

Assuming the 90 days trading horizon Alkim Kagit Sanayi is expected to generate 1.16 times more return on investment than Penguen Gida. However, Alkim Kagit is 1.16 times more volatile than Penguen Gida Sanayi. It trades about 0.03 of its potential returns per unit of risk. Penguen Gida Sanayi is currently generating about 0.03 per unit of risk. If you would invest  579.00  in Alkim Kagit Sanayi on December 11, 2024 and sell it today you would earn a total of  172.00  from holding Alkim Kagit Sanayi or generate 29.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Alkim Kagit Sanayi  vs.  Penguen Gida Sanayi

Alkim Kagit Sanayi

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Kagit Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Alkim Kagit may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Penguen Gida Sanayi

Risk-Adjusted Performance

Weak

Over the last 90 days Penguen Gida Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Penguen Gida is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alkim Kagit and Penguen Gida

The main advantage of trading using opposite Alkim Kagit and Penguen Gida positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkim Kagit position performs unexpectedly, Penguen Gida 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 Penguen Gida will offset losses from the drop in Penguen Gida's long position.

The idea behind Alkim Kagit Sanayi and Penguen Gida Sanayi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.