Correlation Between Penguen Gida and Kardemir Karabuk
Can any of the company-specific risk be diversified away by investing in both Penguen Gida and Kardemir Karabuk 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 Penguen Gida and Kardemir Karabuk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penguen Gida Sanayi and Kardemir Karabuk Demir, you can compare the effects of market volatilities on Penguen Gida and Kardemir Karabuk 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 Penguen Gida with a short position of Kardemir Karabuk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penguen Gida and Kardemir Karabuk.
Diversification Opportunities for Penguen Gida and Kardemir Karabuk
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Penguen and Kardemir is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Penguen Gida Sanayi and Kardemir Karabuk Demir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardemir Karabuk Demir and Penguen Gida 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 Penguen Gida Sanayi are associated (or correlated) with Kardemir Karabuk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardemir Karabuk Demir has no effect on the direction of Penguen Gida i.e., Penguen Gida and Kardemir Karabuk go up and down completely randomly.
Pair Corralation between Penguen Gida and Kardemir Karabuk
Assuming the 90 days trading horizon Penguen Gida is expected to generate 11.2 times less return on investment than Kardemir Karabuk. But when comparing it to its historical volatility, Penguen Gida Sanayi is 1.49 times less risky than Kardemir Karabuk. It trades about 0.03 of its potential returns per unit of risk. Kardemir Karabuk Demir is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,803 in Kardemir Karabuk Demir on September 23, 2024 and sell it today you would earn a total of 1,037 from holding Kardemir Karabuk Demir or generate 57.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Penguen Gida Sanayi vs. Kardemir Karabuk Demir
Performance |
Timeline |
Penguen Gida Sanayi |
Kardemir Karabuk Demir |
Penguen Gida and Kardemir Karabuk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penguen Gida and Kardemir Karabuk
The main advantage of trading using opposite Penguen Gida and Kardemir Karabuk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penguen Gida position performs unexpectedly, Kardemir Karabuk 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 Kardemir Karabuk will offset losses from the drop in Kardemir Karabuk's long position.Penguen Gida vs. Trabzon Liman Isletmeciligi | Penguen Gida vs. Bayrak EBT Taban | Penguen Gida vs. Alkim Kagit Sanayi | Penguen Gida vs. Federal Mogul Izmit |
Kardemir Karabuk vs. Eregli Demir ve | Kardemir Karabuk vs. Iskenderun Demir ve | Kardemir Karabuk vs. Borusan Yatirim ve | Kardemir Karabuk vs. Kardemir Karabuk Demir |
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 Stocks Directory module to find actively traded stocks across global markets.
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