Correlation Between Politeknik Metal and Baticim Bati

Can any of the company-specific risk be diversified away by investing in both Politeknik Metal and Baticim Bati 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 Politeknik Metal and Baticim Bati into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Politeknik Metal Sanayi and Baticim Bati Anadolu, you can compare the effects of market volatilities on Politeknik Metal and Baticim Bati 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 Politeknik Metal with a short position of Baticim Bati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Politeknik Metal and Baticim Bati.

Diversification Opportunities for Politeknik Metal and Baticim Bati

-0.22

Correlation Coefficient

Politeknik Metal  Baticim Bati

Very good diversification

The 3 months correlation between Politeknik and Baticim is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Baticim Bati Anadolu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baticim Bati Anadolu and Politeknik Metal 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 Politeknik Metal Sanayi are associated (or correlated) with Baticim Bati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baticim Bati Anadolu has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Baticim Bati go up and down completely randomly.

Pair Corralation between Politeknik Metal and Baticim Bati

Assuming the 90 days trading horizon Politeknik Metal Sanayi is expected to under-perform the Baticim Bati. In addition to that, Politeknik Metal is 1.24 times more volatile than Baticim Bati Anadolu. It trades about -0.17 of its total potential returns per unit of risk. Baticim Bati Anadolu is currently generating about 0.03 per unit of volatility. If you would invest  13,280  in Baticim Bati Anadolu on October 12, 2024 and sell it today you would earn a total of  890.00  from holding Baticim Bati Anadolu or generate 6.7% return on investment over 90 days.

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

Politeknik Metal Sanayi  vs.  Baticim Bati Anadolu

Politeknik Metal Sanayi

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Politeknik Metal Sanayi are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Politeknik Metal demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Baticim Bati Anadolu

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Politeknik Metal and Baticim Bati

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

The idea behind Politeknik Metal Sanayi and Baticim Bati Anadolu 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.