Correlation Between Eregli Demir and Penguen Gida

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

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

Diversification Opportunities for Eregli Demir and Penguen Gida

0.55

Correlation Coefficient

Eregli Demir  Penguen Gida

Very weak diversification

The 3 months correlation between Eregli and Penguen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve 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 Eregli Demir 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 Eregli Demir ve 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 Eregli Demir i.e., Eregli Demir and Penguen Gida go up and down completely randomly.

Pair Corralation between Eregli Demir and Penguen Gida

Assuming the 90 days trading horizon Eregli Demir ve is expected to under-perform the Penguen Gida. But the stock apears to be less risky and, when comparing its historical volatility, Eregli Demir ve is 1.16 times less risky than Penguen Gida. The stock trades about -0.02 of its potential returns per unit of risk. The Penguen Gida Sanayi is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  596.00  in Penguen Gida Sanayi on October 20, 2024 and sell it today you would earn a total of  47.00  from holding Penguen Gida Sanayi or generate 7.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Eregli Demir ve  vs.  Penguen Gida Sanayi

Eregli Demir ve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Penguen Gida Sanayi

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Penguen Gida Sanayi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Penguen Gida may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Eregli Demir and Penguen Gida

The main advantage of trading using opposite Eregli Demir and Penguen Gida positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir 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 Eregli Demir ve 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.