Correlation Between Karsan Otomotiv and Politeknik Metal
Can any of the company-specific risk be diversified away by investing in both Karsan Otomotiv 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 Karsan Otomotiv and Politeknik Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karsan Otomotiv Sanayi and Politeknik Metal Sanayi, you can compare the effects of market volatilities on Karsan Otomotiv 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 Karsan Otomotiv with a short position of Politeknik Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karsan Otomotiv and Politeknik Metal.
Diversification Opportunities for Karsan Otomotiv and Politeknik Metal
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Karsan and Politeknik is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Karsan Otomotiv 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 Karsan Otomotiv 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 Karsan Otomotiv 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 Karsan Otomotiv i.e., Karsan Otomotiv and Politeknik Metal go up and down completely randomly.
Pair Corralation between Karsan Otomotiv and Politeknik Metal
Assuming the 90 days trading horizon Karsan Otomotiv Sanayi is expected to under-perform the Politeknik Metal. But the stock apears to be less risky and, when comparing its historical volatility, Karsan Otomotiv Sanayi is 2.6 times less risky than Politeknik Metal. The stock trades about -0.2 of its potential returns per unit of risk. The Politeknik Metal Sanayi is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 717,750 in Politeknik Metal Sanayi on September 26, 2024 and sell it today you would lose (43,500) from holding Politeknik Metal Sanayi or give up 6.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Karsan Otomotiv Sanayi vs. Politeknik Metal Sanayi
Performance |
Timeline |
Karsan Otomotiv Sanayi |
Politeknik Metal Sanayi |
Karsan Otomotiv and Politeknik Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Karsan Otomotiv and Politeknik Metal
The main advantage of trading using opposite Karsan Otomotiv and Politeknik Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karsan Otomotiv 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.Karsan Otomotiv vs. Politeknik Metal Sanayi | Karsan Otomotiv vs. Cuhadaroglu Metal Sanayi | Karsan Otomotiv vs. Sodas Sodyum Sanayi | Karsan Otomotiv vs. Gentas Genel Metal |
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Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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