Correlation Between Politeknik Metal and Kristal Kola

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

Diversification Opportunities for Politeknik Metal and Kristal Kola

0.36

Correlation Coefficient

Politeknik Metal  Kristal Kola

Weak diversification

The 3 months correlation between Politeknik and Kristal is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Kristal Kola ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kristal Kola ve 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 Kristal Kola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kristal Kola ve has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Kristal Kola go up and down completely randomly.

Pair Corralation between Politeknik Metal and Kristal Kola

Assuming the 90 days trading horizon Politeknik Metal Sanayi is expected to under-perform the Kristal Kola. But the stock apears to be less risky and, when comparing its historical volatility, Politeknik Metal Sanayi is 1.06 times less risky than Kristal Kola. The stock trades about -0.03 of its potential returns per unit of risk. The Kristal Kola ve is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  569.00  in Kristal Kola ve on December 26, 2024 and sell it today you would earn a total of  18.00  from holding Kristal Kola ve or generate 3.16% return on investment over 90 days.

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

Politeknik Metal Sanayi  vs.  Kristal Kola ve

Politeknik Metal Sanayi

Risk-Adjusted Performance

Very Weak

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

Kristal Kola ve

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kristal Kola ve are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Kristal Kola 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 Kristal Kola

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

The idea behind Politeknik Metal Sanayi and Kristal Kola 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.