Correlation Between Gentas Genel and Makina Takim

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

By analyzing existing cross correlation between Gentas Genel Metal and Makina Takim Endustrisi, you can compare the effects of market volatilities on Gentas Genel and Makina Takim 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 Gentas Genel with a short position of Makina Takim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentas Genel and Makina Takim.

Diversification Opportunities for Gentas Genel and Makina Takim

0.67

Correlation Coefficient

Gentas Genel  Makina Takim

Poor diversification

The 3 months correlation between Gentas and Makina is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gentas Genel Metal and Makina Takim Endustrisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makina Takim Endustrisi and Gentas Genel 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 Gentas Genel Metal are associated (or correlated) with Makina Takim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makina Takim Endustrisi has no effect on the direction of Gentas Genel i.e., Gentas Genel and Makina Takim go up and down completely randomly.

Pair Corralation between Gentas Genel and Makina Takim

Assuming the 90 days trading horizon Gentas Genel Metal is expected to generate 0.6 times more return on investment than Makina Takim. However, Gentas Genel Metal is 1.66 times less risky than Makina Takim. It trades about 0.46 of its potential returns per unit of risk. Makina Takim Endustrisi is currently generating about 0.11 per unit of risk. If you would invest  784.00  in Gentas Genel Metal on September 21, 2024 and sell it today you would earn a total of  159.00  from holding Gentas Genel Metal or generate 20.28% return on investment over 90 days.

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

Gentas Genel Metal  vs.  Makina Takim Endustrisi

Gentas Genel Metal

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gentas Genel Metal are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gentas Genel demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Makina Takim Endustrisi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gentas Genel and Makina Takim

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

The idea behind Gentas Genel Metal and Makina Takim Endustrisi 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.