Correlation Between Petkim Petrokimya and Eregli Demir

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

Diversification Opportunities for Petkim Petrokimya and Eregli Demir

-0.06

Correlation Coefficient

Petkim Petrokimya  Eregli Demir

Good diversification

The 3 months correlation between Petkim and Eregli is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir 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 Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Petkim Petrokimya i.e., Petkim Petrokimya and Eregli Demir go up and down completely randomly.

Pair Corralation between Petkim Petrokimya and Eregli Demir

Assuming the 90 days trading horizon Petkim Petrokimya Holding is expected to under-perform the Eregli Demir. In addition to that, Petkim Petrokimya is 1.26 times more volatile than Eregli Demir ve. It trades about -0.14 of its total potential returns per unit of risk. Eregli Demir ve is currently generating about 0.08 per unit of volatility. If you would invest  2,402  in Eregli Demir ve on September 5, 2024 and sell it today you would earn a total of  198.00  from holding Eregli Demir ve or generate 8.24% return on investment over 90 days.

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

Petkim Petrokimya Holding  vs.  Eregli Demir 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 inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Eregli Demir ve

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Petkim Petrokimya and Eregli Demir

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

The idea behind Petkim Petrokimya Holding and Eregli Demir 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.

Check out your portfolio center.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.