Correlation Between Politeknik Metal and Zedur Enerji

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

Diversification Opportunities for Politeknik Metal and Zedur Enerji

0.81

Correlation Coefficient

Politeknik Metal  Zedur Enerji

Very poor diversification

The 3 months correlation between Politeknik and Zedur is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Zedur Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedur Enerji Elektrik 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 Zedur Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedur Enerji Elektrik has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Zedur Enerji go up and down completely randomly.

Pair Corralation between Politeknik Metal and Zedur Enerji

Assuming the 90 days trading horizon Politeknik Metal Sanayi is expected to generate 1.05 times more return on investment than Zedur Enerji. However, Politeknik Metal is 1.05 times more volatile than Zedur Enerji Elektrik. It trades about -0.03 of its potential returns per unit of risk. Zedur Enerji Elektrik is currently generating about -0.1 per unit of risk. If you would invest  673,500  in Politeknik Metal Sanayi on December 29, 2024 and sell it today you would lose (49,000) from holding Politeknik Metal Sanayi or give up 7.28% of portfolio value over 90 days.

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

Politeknik Metal Sanayi  vs.  Zedur Enerji Elektrik

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.

Zedur Enerji Elektrik

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zedur Enerji Elektrik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Politeknik Metal and Zedur Enerji

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

The idea behind Politeknik Metal Sanayi and Zedur Enerji Elektrik 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.