Correlation Between Iskenderun Demir and MEGA METAL

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

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

Diversification Opportunities for Iskenderun Demir and MEGA METAL

0.34

Correlation Coefficient

Iskenderun Demir  MEGA METAL

Weak diversification

The 3 months correlation between Iskenderun and MEGA is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Iskenderun Demir ve and MEGA METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEGA METAL and Iskenderun 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 Iskenderun Demir ve are associated (or correlated) with MEGA METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEGA METAL has no effect on the direction of Iskenderun Demir i.e., Iskenderun Demir and MEGA METAL go up and down completely randomly.

Pair Corralation between Iskenderun Demir and MEGA METAL

Assuming the 90 days trading horizon Iskenderun Demir ve is expected to generate 0.95 times more return on investment than MEGA METAL. However, Iskenderun Demir ve is 1.05 times less risky than MEGA METAL. It trades about -0.11 of its potential returns per unit of risk. MEGA METAL is currently generating about -0.12 per unit of risk. If you would invest  4,150  in Iskenderun Demir ve on December 24, 2024 and sell it today you would lose (650.00) from holding Iskenderun Demir ve or give up 15.66% of portfolio value over 90 days.

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

Iskenderun Demir ve  vs.  MEGA METAL

Iskenderun Demir

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iskenderun Demir ve 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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

MEGA METAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days MEGA METAL 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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Iskenderun Demir and MEGA METAL

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

The idea behind Iskenderun Demir ve and MEGA METAL 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.