Correlation Between Platform Turizm and Kardemir Karabuk

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

By analyzing existing cross correlation between Platform Turizm Tasimacilik and Kardemir Karabuk Demir, you can compare the effects of market volatilities on Platform Turizm and Kardemir Karabuk 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 Platform Turizm with a short position of Kardemir Karabuk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platform Turizm and Kardemir Karabuk.

Diversification Opportunities for Platform Turizm and Kardemir Karabuk

0.9

Correlation Coefficient

Platform Turizm  Kardemir Karabuk

Almost no diversification

The 3 months correlation between Platform and Kardemir is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Platform Turizm Tasimacilik and Kardemir Karabuk Demir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardemir Karabuk Demir and Platform 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 Platform Turizm Tasimacilik are associated (or correlated) with Kardemir Karabuk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardemir Karabuk Demir has no effect on the direction of Platform Turizm i.e., Platform Turizm and Kardemir Karabuk go up and down completely randomly.

Pair Corralation between Platform Turizm and Kardemir Karabuk

Assuming the 90 days trading horizon Platform Turizm is expected to generate 1.24 times less return on investment than Kardemir Karabuk. In addition to that, Platform Turizm is 1.19 times more volatile than Kardemir Karabuk Demir. It trades about 0.18 of its total potential returns per unit of risk. Kardemir Karabuk Demir is currently generating about 0.27 per unit of volatility. If you would invest  1,910  in Kardemir Karabuk Demir on October 11, 2024 and sell it today you would earn a total of  1,120  from holding Kardemir Karabuk Demir or generate 58.64% return on investment over 90 days.

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

Platform Turizm Tasimacilik  vs.  Kardemir Karabuk Demir

Platform Turizm Tasi

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Platform Turizm Tasimacilik are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Platform Turizm demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Kardemir Karabuk Demir

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kardemir Karabuk Demir are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kardemir Karabuk demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Platform Turizm and Kardemir Karabuk

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

The idea behind Platform Turizm Tasimacilik and Kardemir Karabuk Demir 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.