Correlation Between Politeknik Metal and Yesil Yapi

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

Diversification Opportunities for Politeknik Metal and Yesil Yapi

0.79

Correlation Coefficient

Politeknik Metal  Yesil Yapi

Poor diversification

The 3 months correlation between Politeknik and Yesil is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Yesil Yapi Endustrisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yesil Yapi 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 Yesil Yapi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yesil Yapi Endustrisi has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Yesil Yapi go up and down completely randomly.

Pair Corralation between Politeknik Metal and Yesil Yapi

Assuming the 90 days trading horizon Politeknik Metal is expected to generate 3.76 times less return on investment than Yesil Yapi. But when comparing it to its historical volatility, Politeknik Metal Sanayi is 1.4 times less risky than Yesil Yapi. It trades about 0.06 of its potential returns per unit of risk. Yesil Yapi Endustrisi is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  157.00  in Yesil Yapi Endustrisi on October 9, 2024 and sell it today you would earn a total of  71.00  from holding Yesil Yapi Endustrisi or generate 45.22% 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.  Yesil Yapi Endustrisi

Politeknik Metal Sanayi

Risk-Adjusted Performance

4 of 100

Modest

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.

Yesil Yapi Endustrisi

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yesil Yapi Endustrisi are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Yesil Yapi demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Politeknik Metal and Yesil Yapi

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

The idea behind Politeknik Metal Sanayi and Yesil Yapi 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.