Correlation Between Politeknik Metal and Makina Takim

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

Diversification Opportunities for Politeknik Metal and Makina Takim

0.61

Correlation Coefficient

Politeknik Metal  Makina Takim

Poor diversification

The 3 months correlation between Politeknik and Makina is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Makina Takim Endustrisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makina Takim Endustrisi 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 Makina Takim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makina Takim Endustrisi has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Makina Takim go up and down completely randomly.

Pair Corralation between Politeknik Metal and Makina Takim

Assuming the 90 days trading horizon Politeknik Metal Sanayi is expected to under-perform the Makina Takim. But the stock apears to be less risky and, when comparing its historical volatility, Politeknik Metal Sanayi is 1.71 times less risky than Makina Takim. The stock trades about -0.05 of its potential returns per unit of risk. The Makina Takim Endustrisi is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  672.00  in Makina Takim Endustrisi on October 6, 2024 and sell it today you would earn a total of  39.00  from holding Makina Takim Endustrisi or generate 5.8% return on investment over 90 days.

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

Politeknik Metal Sanayi  vs.  Makina Takim Endustrisi

Politeknik Metal Sanayi

Risk-Adjusted Performance

4 of 100

Insignificant

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

Makina Takim Endustrisi

Risk-Adjusted Performance

9 of 100

Very Weak

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

Pair Trading with Politeknik Metal and Makina Takim

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

The idea behind Politeknik Metal Sanayi and Makina Takim Endustrisi 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 Transaction History module to view history of all your transactions and understand their impact on performance.