Correlation Between Petkim Petrokimya and Ege Endustri

Can any of the company-specific risk be diversified away by investing in both Petkim Petrokimya and Ege Endustri 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 Ege Endustri 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 Ege Endustri ve, you can compare the effects of market volatilities on Petkim Petrokimya and Ege Endustri 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 Ege Endustri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petkim Petrokimya and Ege Endustri.

Diversification Opportunities for Petkim Petrokimya and Ege Endustri

-0.31

Correlation Coefficient

Petkim Petrokimya  Ege Endustri

Very good diversification

The 3 months correlation between Petkim and Ege is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding and Ege Endustri ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Endustri ve 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 Ege Endustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Endustri ve has no effect on the direction of Petkim Petrokimya i.e., Petkim Petrokimya and Ege Endustri go up and down completely randomly.

Pair Corralation between Petkim Petrokimya and Ege Endustri

Assuming the 90 days trading horizon Petkim Petrokimya Holding is expected to generate 0.76 times more return on investment than Ege Endustri. However, Petkim Petrokimya Holding is 1.32 times less risky than Ege Endustri. It trades about 0.0 of its potential returns per unit of risk. Ege Endustri ve is currently generating about -0.02 per unit of risk. If you would invest  2,012  in Petkim Petrokimya Holding on October 3, 2024 and sell it today you would lose (202.00) from holding Petkim Petrokimya Holding or give up 10.04% of portfolio value over 90 days.

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

Petkim Petrokimya Holding  vs.  Ege Endustri ve

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.

Ege Endustri ve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Petkim Petrokimya and Ege Endustri

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

The idea behind Petkim Petrokimya Holding and Ege Endustri ve 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.