Correlation Between Kristal Kola and MEGA METAL

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

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

Diversification Opportunities for Kristal Kola and MEGA METAL

-0.33

Correlation Coefficient

Kristal Kola  MEGA METAL

Very good diversification

The 3 months correlation between Kristal and MEGA is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kristal Kola ve and MEGA METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEGA METAL and Kristal Kola 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 Kristal Kola 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 Kristal Kola i.e., Kristal Kola and MEGA METAL go up and down completely randomly.

Pair Corralation between Kristal Kola and MEGA METAL

Assuming the 90 days trading horizon Kristal Kola ve is expected to under-perform the MEGA METAL. But the stock apears to be less risky and, when comparing its historical volatility, Kristal Kola ve is 1.08 times less risky than MEGA METAL. The stock trades about 0.0 of its potential returns per unit of risk. The MEGA METAL is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,112  in MEGA METAL on September 23, 2024 and sell it today you would earn a total of  28.00  from holding MEGA METAL or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.31%
Values	Daily Returns

Kristal Kola ve  vs.  MEGA METAL

Kristal Kola ve

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kristal Kola ve are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Kristal Kola is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

MEGA METAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEGA METAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Kristal Kola and MEGA METAL

The main advantage of trading using opposite Kristal Kola and MEGA METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kristal Kola 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 Kristal Kola 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.