Correlation Between Petkim Petrokimya and Aksa Enerji

Can any of the company-specific risk be diversified away by investing in both Petkim Petrokimya and Aksa 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 Petkim Petrokimya and Aksa Enerji into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Petkim Petrokimya Holding and Aksa Enerji Uretim, you can compare the effects of market volatilities on Petkim Petrokimya and Aksa 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 Petkim Petrokimya with a short position of Aksa Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petkim Petrokimya and Aksa Enerji.

Diversification Opportunities for Petkim Petrokimya and Aksa Enerji

0.27

Correlation Coefficient

Petkim Petrokimya  Aksa Enerji

Modest diversification

The 3 months correlation between Petkim and Aksa is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding and Aksa Enerji Uretim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aksa Enerji Uretim and Petkim Petrokimya 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 Petkim Petrokimya Holding are associated (or correlated) with Aksa Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aksa Enerji Uretim has no effect on the direction of Petkim Petrokimya i.e., Petkim Petrokimya and Aksa Enerji go up and down completely randomly.

Pair Corralation between Petkim Petrokimya and Aksa Enerji

Assuming the 90 days trading horizon Petkim Petrokimya Holding is expected to under-perform the Aksa Enerji. But the stock apears to be less risky and, when comparing its historical volatility, Petkim Petrokimya Holding is 1.06 times less risky than Aksa Enerji. The stock trades about -0.16 of its potential returns per unit of risk. The Aksa Enerji Uretim is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  3,588  in Aksa Enerji Uretim on October 5, 2024 and sell it today you would earn a total of  362.00  from holding Aksa Enerji Uretim or generate 10.09% return on investment over 90 days.

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

Petkim Petrokimya Holding  vs.  Aksa Enerji Uretim

Petkim Petrokimya Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petkim Petrokimya Holding 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.

Aksa Enerji Uretim

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aksa Enerji Uretim are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Aksa Enerji demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Petkim Petrokimya and Aksa Enerji

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

The idea behind Petkim Petrokimya Holding and Aksa Enerji 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.