Correlation Between E Data and Petrokent Turizm

Can any of the company-specific risk be diversified away by investing in both E Data and Petrokent Turizm 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 E Data and Petrokent Turizm into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E Data Teknoloji Pazarlama and Petrokent Turizm AS, you can compare the effects of market volatilities on E Data and Petrokent Turizm 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 E Data with a short position of Petrokent Turizm. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Data and Petrokent Turizm.

Diversification Opportunities for E Data and Petrokent Turizm

-0.2

Correlation Coefficient

E Data  Petrokent Turizm

Good diversification

The 3 months correlation between EDATA and Petrokent is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding E Data Teknoloji Pazarlama and Petrokent Turizm AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrokent Turizm and E Data 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 E Data Teknoloji Pazarlama are associated (or correlated) with Petrokent Turizm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrokent Turizm has no effect on the direction of E Data i.e., E Data and Petrokent Turizm go up and down completely randomly.

Pair Corralation between E Data and Petrokent Turizm

Assuming the 90 days trading horizon E Data Teknoloji Pazarlama is expected to generate 2.4 times more return on investment than Petrokent Turizm. However, E Data is 2.4 times more volatile than Petrokent Turizm AS. It trades about 0.04 of its potential returns per unit of risk. Petrokent Turizm AS is currently generating about 0.05 per unit of risk. If you would invest  701.00  in E Data Teknoloji Pazarlama on October 4, 2024 and sell it today you would earn a total of  566.00  from holding E Data Teknoloji Pazarlama or generate 80.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

E Data Teknoloji Pazarlama  vs.  Petrokent Turizm AS

E Data Teknoloji

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E Data Teknoloji Pazarlama 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.

Petrokent Turizm

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Petrokent Turizm AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Petrokent Turizm demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with E Data and Petrokent Turizm

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

The idea behind E Data Teknoloji Pazarlama and Petrokent Turizm AS 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.