Correlation Between MEGA METAL and GSD Denizcilik

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

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

Diversification Opportunities for MEGA METAL and GSD Denizcilik

0.8

Correlation Coefficient

MEGA METAL  GSD Denizcilik

Very poor diversification

The 3 months correlation between MEGA and GSD is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and GSD Denizcilik Gayrimenkul in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSD Denizcilik Gayri and MEGA METAL 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 MEGA METAL are associated (or correlated) with GSD Denizcilik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSD Denizcilik Gayri has no effect on the direction of MEGA METAL i.e., MEGA METAL and GSD Denizcilik go up and down completely randomly.

Pair Corralation between MEGA METAL and GSD Denizcilik

Assuming the 90 days trading horizon MEGA METAL is expected to under-perform the GSD Denizcilik. But the stock apears to be less risky and, when comparing its historical volatility, MEGA METAL is 1.78 times less risky than GSD Denizcilik. The stock trades about -0.11 of its potential returns per unit of risk. The GSD Denizcilik Gayrimenkul is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  935.00  in GSD Denizcilik Gayrimenkul on October 9, 2024 and sell it today you would earn a total of  16.00  from holding GSD Denizcilik Gayrimenkul or generate 1.71% return on investment over 90 days.

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

MEGA METAL  vs.  GSD Denizcilik Gayrimenkul

MEGA METAL

Risk-Adjusted Performance

2 of 100

Weak

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

GSD Denizcilik Gayri

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GSD Denizcilik Gayrimenkul are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, GSD Denizcilik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MEGA METAL and GSD Denizcilik

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

The idea behind MEGA METAL and GSD Denizcilik Gayrimenkul 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.