Correlation Between Penta Teknoloji and Ozerden Plastik

Can any of the company-specific risk be diversified away by investing in both Penta Teknoloji and Ozerden Plastik 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 Ozerden Plastik 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 Ozerden Plastik Sanayi, you can compare the effects of market volatilities on Penta Teknoloji and Ozerden Plastik 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 Ozerden Plastik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Teknoloji and Ozerden Plastik.

Diversification Opportunities for Penta Teknoloji and Ozerden Plastik

0.75

Correlation Coefficient

Penta Teknoloji  Ozerden Plastik

Poor diversification

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

Pair Corralation between Penta Teknoloji and Ozerden Plastik

Assuming the 90 days trading horizon Penta Teknoloji Urunleri is expected to generate 0.91 times more return on investment than Ozerden Plastik. However, Penta Teknoloji Urunleri is 1.1 times less risky than Ozerden Plastik. It trades about 0.26 of its potential returns per unit of risk. Ozerden Plastik Sanayi is currently generating about 0.11 per unit of risk. If you would invest  1,410  in Penta Teknoloji Urunleri on September 21, 2024 and sell it today you would earn a total of  135.00  from holding Penta Teknoloji Urunleri or generate 9.57% return on investment over 90 days.

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

Penta Teknoloji Urunleri  vs.  Ozerden Plastik Sanayi

Penta Teknoloji Urunleri

Risk-Adjusted Performance

2 of 100

Weak

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

Ozerden Plastik Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ozerden Plastik Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Ozerden Plastik is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Penta Teknoloji and Ozerden Plastik

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

The idea behind Penta Teknoloji Urunleri and Ozerden Plastik 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.