Correlation Between Politeknik Metal and Sekerbank TAS

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

Diversification Opportunities for Politeknik Metal and Sekerbank TAS

0.73

Correlation Coefficient

Politeknik Metal  Sekerbank TAS

Poor diversification

The 3 months correlation between Politeknik and Sekerbank is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Sekerbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekerbank TAS 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 Sekerbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekerbank TAS has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Sekerbank TAS go up and down completely randomly.

Pair Corralation between Politeknik Metal and Sekerbank TAS

Assuming the 90 days trading horizon Politeknik Metal is expected to generate 10.34 times less return on investment than Sekerbank TAS. In addition to that, Politeknik Metal is 1.12 times more volatile than Sekerbank TAS. It trades about 0.01 of its total potential returns per unit of risk. Sekerbank TAS is currently generating about 0.09 per unit of volatility. If you would invest  431.00  in Sekerbank TAS on September 12, 2024 and sell it today you would earn a total of  62.00  from holding Sekerbank TAS or generate 14.39% 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.  Sekerbank TAS

Politeknik Metal Sanayi

Risk-Adjusted Performance

0 of 100

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 newest stock price confusion, may contribute to short-horizon losses for the traders.

Sekerbank TAS

Risk-Adjusted Performance

7 of 100

Modest

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

Pair Trading with Politeknik Metal and Sekerbank TAS

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

The idea behind Politeknik Metal Sanayi and Sekerbank TAS 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.