Correlation Between Penguen Gida and ODAS Elektrik

Can any of the company-specific risk be diversified away by investing in both Penguen Gida and ODAS Elektrik 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 ODAS Elektrik 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 ODAS Elektrik Uretim, you can compare the effects of market volatilities on Penguen Gida and ODAS Elektrik 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 ODAS Elektrik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penguen Gida and ODAS Elektrik.

Diversification Opportunities for Penguen Gida and ODAS Elektrik

0.8

Correlation Coefficient

Penguen Gida  ODAS Elektrik

Very poor diversification

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

Pair Corralation between Penguen Gida and ODAS Elektrik

Assuming the 90 days trading horizon Penguen Gida Sanayi is expected to generate 1.05 times more return on investment than ODAS Elektrik. However, Penguen Gida is 1.05 times more volatile than ODAS Elektrik Uretim. It trades about 0.01 of its potential returns per unit of risk. ODAS Elektrik Uretim is currently generating about -0.08 per unit of risk. If you would invest  702.00  in Penguen Gida Sanayi on September 23, 2024 and sell it today you would lose (20.00) from holding Penguen Gida Sanayi or give up 2.85% of portfolio value over 90 days.

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

Penguen Gida Sanayi  vs.  ODAS Elektrik Uretim

Penguen Gida Sanayi

Risk-Adjusted Performance

2 of 100

Weak

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

ODAS Elektrik Uretim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ODAS Elektrik Uretim has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ODAS Elektrik is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Penguen Gida and ODAS Elektrik

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

The idea behind Penguen Gida Sanayi and ODAS Elektrik Uretim 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 Transaction History module to view history of all your transactions and understand their impact on performance.