Correlation Between Penta Teknoloji and Konya Cimento

Can any of the company-specific risk be diversified away by investing in both Penta Teknoloji and Konya Cimento 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 Penta Teknoloji and Konya Cimento into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Penta Teknoloji Urunleri and Konya Cimento Sanayi, you can compare the effects of market volatilities on Penta Teknoloji and Konya Cimento 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 Penta Teknoloji with a short position of Konya Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Teknoloji and Konya Cimento.

Diversification Opportunities for Penta Teknoloji and Konya Cimento

0.82

Correlation Coefficient

Penta Teknoloji  Konya Cimento

Very poor diversification

The 3 months correlation between Penta and Konya is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Penta Teknoloji Urunleri and Konya Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konya Cimento Sanayi and Penta Teknoloji 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 Penta Teknoloji Urunleri are associated (or correlated) with Konya Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konya Cimento Sanayi has no effect on the direction of Penta Teknoloji i.e., Penta Teknoloji and Konya Cimento go up and down completely randomly.

Pair Corralation between Penta Teknoloji and Konya Cimento

Assuming the 90 days trading horizon Penta Teknoloji Urunleri is expected to generate 1.04 times more return on investment than Konya Cimento. However, Penta Teknoloji is 1.04 times more volatile than Konya Cimento Sanayi. It trades about -0.07 of its potential returns per unit of risk. Konya Cimento Sanayi is currently generating about -0.08 per unit of risk. If you would invest  1,565  in Penta Teknoloji Urunleri on December 30, 2024 and sell it today you would lose (203.00) from holding Penta Teknoloji Urunleri or give up 12.97% of portfolio value over 90 days.

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

Penta Teknoloji Urunleri  vs.  Konya Cimento Sanayi

Penta Teknoloji Urunleri

Risk-Adjusted Performance

Very Weak

Over the last 90 days Penta Teknoloji Urunleri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Konya Cimento Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Konya Cimento Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Penta Teknoloji and Konya Cimento

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

The idea behind Penta Teknoloji Urunleri and Konya Cimento Sanayi 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.