Correlation Between MEGA METAL and Lokman Hekim

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

By analyzing existing cross correlation between MEGA METAL and Lokman Hekim Engurusag, you can compare the effects of market volatilities on MEGA METAL and Lokman Hekim 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 Lokman Hekim. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEGA METAL and Lokman Hekim.

Diversification Opportunities for MEGA METAL and Lokman Hekim

0.67

Correlation Coefficient

MEGA METAL  Lokman Hekim

Poor diversification

The 3 months correlation between MEGA and Lokman is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and Lokman Hekim Engurusag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lokman Hekim Engurusag 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 Lokman Hekim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lokman Hekim Engurusag has no effect on the direction of MEGA METAL i.e., MEGA METAL and Lokman Hekim go up and down completely randomly.

Pair Corralation between MEGA METAL and Lokman Hekim

Assuming the 90 days trading horizon MEGA METAL is expected to generate 1.4 times less return on investment than Lokman Hekim. In addition to that, MEGA METAL is 1.38 times more volatile than Lokman Hekim Engurusag. It trades about 0.07 of its total potential returns per unit of risk. Lokman Hekim Engurusag is currently generating about 0.13 per unit of volatility. If you would invest  1,510  in Lokman Hekim Engurusag on September 27, 2024 and sell it today you would earn a total of  125.00  from holding Lokman Hekim Engurusag or generate 8.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.67%
Values	Daily Returns

MEGA METAL  vs.  Lokman Hekim Engurusag

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 fairly strong forward indicators, MEGA METAL is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Lokman Hekim Engurusag

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lokman Hekim Engurusag has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Lokman Hekim is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with MEGA METAL and Lokman Hekim

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

The idea behind MEGA METAL and Lokman Hekim Engurusag 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.