Correlation Between MEGA METAL and Yapi Ve

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

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

Diversification Opportunities for MEGA METAL and Yapi Ve

0.54

Correlation Coefficient

MEGA METAL  Yapi Ve

Very weak diversification

The 3 months correlation between MEGA and Yapi is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and Yapi ve Kredi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yapi ve Kredi 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 Yapi Ve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yapi ve Kredi has no effect on the direction of MEGA METAL i.e., MEGA METAL and Yapi Ve go up and down completely randomly.

Pair Corralation between MEGA METAL and Yapi Ve

Assuming the 90 days trading horizon MEGA METAL is expected to generate 10.02 times less return on investment than Yapi Ve. But when comparing it to its historical volatility, MEGA METAL is 1.41 times less risky than Yapi Ve. It trades about 0.04 of its potential returns per unit of risk. Yapi ve Kredi is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  2,304  in Yapi ve Kredi on October 6, 2024 and sell it today you would earn a total of  914.00  from holding Yapi ve Kredi or generate 39.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.73%
Values	Daily Returns

MEGA METAL  vs.  Yapi ve Kredi

MEGA METAL

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MEGA METAL are ranked lower than 1 (%) 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.

Yapi ve Kredi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yapi ve Kredi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Yapi Ve demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MEGA METAL and Yapi Ve

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

The idea behind MEGA METAL and Yapi ve Kredi 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.