Correlation Between FMC and Penguen Gida

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

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

Diversification Opportunities for FMC and Penguen Gida

-0.54

Correlation Coefficient

FMC  Penguen Gida

Excellent diversification

The 3 months correlation between FMC and Penguen is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp. 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 FMC 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 FMC Corporation 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 FMC i.e., FMC and Penguen Gida go up and down completely randomly.

Pair Corralation between FMC and Penguen Gida

Considering the 90-day investment horizon FMC Corporation is expected to under-perform the Penguen Gida. But the stock apears to be less risky and, when comparing its historical volatility, FMC Corporation is 1.28 times less risky than Penguen Gida. The stock trades about -0.06 of its potential returns per unit of risk. The Penguen Gida Sanayi is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  734.00  in Penguen Gida Sanayi on October 4, 2024 and sell it today you would lose (54.00) from holding Penguen Gida Sanayi or give up 7.36% of portfolio value over 90 days.

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

FMC Corp.  vs.  Penguen Gida Sanayi

FMC Corporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FMC Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Penguen Gida Sanayi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penguen Gida Sanayi are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Penguen Gida demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FMC and Penguen Gida

The main advantage of trading using opposite FMC and Penguen Gida positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FMC 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 FMC Corporation 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .