Correlation Between Celik Halat and Politeknik Metal

Can any of the company-specific risk be diversified away by investing in both Celik Halat and Politeknik 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 Celik Halat and Politeknik Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Celik Halat ve and Politeknik Metal Sanayi, you can compare the effects of market volatilities on Celik Halat and Politeknik 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 Celik Halat with a short position of Politeknik Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celik Halat and Politeknik Metal.

Diversification Opportunities for Celik Halat and Politeknik Metal

-0.45

Correlation Coefficient

Celik Halat  Politeknik Metal

Very good diversification

The 3 months correlation between Celik and Politeknik is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Celik Halat ve and Politeknik Metal Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Politeknik Metal Sanayi and Celik Halat 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 Celik Halat ve are associated (or correlated) with Politeknik Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Politeknik Metal Sanayi has no effect on the direction of Celik Halat i.e., Celik Halat and Politeknik Metal go up and down completely randomly.

Pair Corralation between Celik Halat and Politeknik Metal

Assuming the 90 days trading horizon Celik Halat ve is expected to under-perform the Politeknik Metal. But the stock apears to be less risky and, when comparing its historical volatility, Celik Halat ve is 1.19 times less risky than Politeknik Metal. The stock trades about -0.1 of its potential returns per unit of risk. The Politeknik Metal Sanayi is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  645,000  in Politeknik Metal Sanayi on October 5, 2024 and sell it today you would earn a total of  43,000  from holding Politeknik Metal Sanayi or generate 6.67% return on investment over 90 days.

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

Celik Halat ve  vs.  Politeknik Metal Sanayi

Celik Halat ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celik Halat ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Politeknik Metal Sanayi

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Politeknik Metal Sanayi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Politeknik Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Celik Halat and Politeknik Metal

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

The idea behind Celik Halat ve and Politeknik Metal 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.