Correlation Between Penguen Gida and Zorlu Enerji

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

Diversification Opportunities for Penguen Gida and Zorlu Enerji

0.75

Correlation Coefficient

Penguen Gida  Zorlu Enerji

Poor diversification

The 3 months correlation between Penguen and Zorlu is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Penguen Gida Sanayi and Zorlu Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zorlu Enerji Elektrik 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 Zorlu Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zorlu Enerji Elektrik has no effect on the direction of Penguen Gida i.e., Penguen Gida and Zorlu Enerji go up and down completely randomly.

Pair Corralation between Penguen Gida and Zorlu Enerji

Assuming the 90 days trading horizon Penguen Gida Sanayi is expected to generate 1.07 times more return on investment than Zorlu Enerji. However, Penguen Gida is 1.07 times more volatile than Zorlu Enerji Elektrik. It trades about 0.12 of its potential returns per unit of risk. Zorlu Enerji Elektrik is currently generating about 0.08 per unit of risk. If you would invest  596.00  in Penguen Gida Sanayi on October 4, 2024 and sell it today you would earn a total of  80.00  from holding Penguen Gida Sanayi or generate 13.42% return on investment over 90 days.

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

Penguen Gida Sanayi  vs.  Zorlu Enerji Elektrik

Penguen Gida Sanayi

Risk-Adjusted Performance

9 of 100

OK

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

Zorlu Enerji Elektrik

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zorlu Enerji Elektrik are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Zorlu Enerji may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Penguen Gida and Zorlu Enerji

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

The idea behind Penguen Gida Sanayi and Zorlu Enerji Elektrik 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.