Correlation Between Eminis Ambalaj and Politeknik Metal

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

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

Diversification Opportunities for Eminis Ambalaj and Politeknik Metal

-0.36

Correlation Coefficient

Eminis Ambalaj  Politeknik Metal

Very good diversification

The 3 months correlation between Eminis and Politeknik is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eminis Ambalaj Sanayi 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 Eminis Ambalaj 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 Eminis Ambalaj Sanayi 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 Eminis Ambalaj i.e., Eminis Ambalaj and Politeknik Metal go up and down completely randomly.

Pair Corralation between Eminis Ambalaj and Politeknik Metal

Assuming the 90 days trading horizon Eminis Ambalaj is expected to generate 17.06 times less return on investment than Politeknik Metal. In addition to that, Eminis Ambalaj is 1.61 times more volatile than Politeknik Metal Sanayi. It trades about 0.0 of its total potential returns per unit of risk. Politeknik Metal Sanayi is currently generating about 0.11 per unit of volatility. If you would invest  614,250  in Politeknik Metal Sanayi on October 6, 2024 and sell it today you would earn a total of  81,250  from holding Politeknik Metal Sanayi or generate 13.23% return on investment over 90 days.

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

Eminis Ambalaj Sanayi  vs.  Politeknik Metal Sanayi

Eminis Ambalaj Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eminis Ambalaj Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Politeknik Metal Sanayi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Politeknik Metal Sanayi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Politeknik Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Eminis Ambalaj and Politeknik Metal

The main advantage of trading using opposite Eminis Ambalaj and Politeknik Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eminis Ambalaj 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 Eminis Ambalaj Sanayi 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.