Correlation Between Petrokent Turizm and Gentas Genel

Can any of the company-specific risk be diversified away by investing in both Petrokent Turizm and Gentas Genel 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 Petrokent Turizm and Gentas Genel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Petrokent Turizm AS and Gentas Genel Metal, you can compare the effects of market volatilities on Petrokent Turizm and Gentas Genel 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 Petrokent Turizm with a short position of Gentas Genel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrokent Turizm and Gentas Genel.

Diversification Opportunities for Petrokent Turizm and Gentas Genel

0.58

Correlation Coefficient

Petrokent Turizm  Gentas Genel

Very weak diversification

The 3 months correlation between Petrokent and Gentas is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Petrokent Turizm AS and Gentas Genel Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentas Genel Metal and Petrokent Turizm 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 Petrokent Turizm AS are associated (or correlated) with Gentas Genel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentas Genel Metal has no effect on the direction of Petrokent Turizm i.e., Petrokent Turizm and Gentas Genel go up and down completely randomly.

Pair Corralation between Petrokent Turizm and Gentas Genel

Assuming the 90 days trading horizon Petrokent Turizm is expected to generate 1.59 times less return on investment than Gentas Genel. In addition to that, Petrokent Turizm is 1.42 times more volatile than Gentas Genel Metal. It trades about 0.05 of its total potential returns per unit of risk. Gentas Genel Metal is currently generating about 0.12 per unit of volatility. If you would invest  811.00  in Gentas Genel Metal on September 23, 2024 and sell it today you would earn a total of  132.00  from holding Gentas Genel Metal or generate 16.28% return on investment over 90 days.

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

Petrokent Turizm AS  vs.  Gentas Genel Metal

Petrokent Turizm

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Petrokent Turizm AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Petrokent Turizm may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gentas Genel Metal

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gentas Genel Metal are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gentas Genel demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Petrokent Turizm and Gentas Genel

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

The idea behind Petrokent Turizm AS and Gentas Genel Metal 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.