Correlation Between KOC METALURJI and Penguen Gida

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

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

Diversification Opportunities for KOC METALURJI and Penguen Gida

0.63

Correlation Coefficient

KOC METALURJI  Penguen Gida

Poor diversification

The 3 months correlation between KOC and Penguen is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding KOC METALURJI 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 KOC METALURJI 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 KOC METALURJI 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 KOC METALURJI i.e., KOC METALURJI and Penguen Gida go up and down completely randomly.

Pair Corralation between KOC METALURJI and Penguen Gida

Assuming the 90 days trading horizon KOC METALURJI is expected to generate 1.33 times more return on investment than Penguen Gida. However, KOC METALURJI is 1.33 times more volatile than Penguen Gida Sanayi. It trades about 0.15 of its potential returns per unit of risk. Penguen Gida Sanayi is currently generating about 0.13 per unit of risk. If you would invest  1,474  in KOC METALURJI on October 7, 2024 and sell it today you would earn a total of  226.00  from holding KOC METALURJI or generate 15.33% return on investment over 90 days.

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

KOC METALURJI  vs.  Penguen Gida Sanayi

KOC METALURJI

Risk-Adjusted Performance

10 of 100

OK

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

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 KOC METALURJI and Penguen Gida

The main advantage of trading using opposite KOC METALURJI and Penguen Gida positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOC METALURJI 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 KOC METALURJI 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.