Correlation Between Verusaturk Girisim and Politeknik Metal

Can any of the company-specific risk be diversified away by investing in both Verusaturk Girisim and Politeknik Metal 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 Verusaturk Girisim and Politeknik Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Verusaturk Girisim Sermayesi and Politeknik Metal Sanayi, you can compare the effects of market volatilities on Verusaturk Girisim and Politeknik Metal 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 Verusaturk Girisim with a short position of Politeknik Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verusaturk Girisim and Politeknik Metal.

Diversification Opportunities for Verusaturk Girisim and Politeknik Metal

0.81

Correlation Coefficient

Verusaturk Girisim  Politeknik Metal

Very poor diversification

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

Pair Corralation between Verusaturk Girisim and Politeknik Metal

Assuming the 90 days trading horizon Verusaturk Girisim Sermayesi is expected to generate 0.85 times more return on investment than Politeknik Metal. However, Verusaturk Girisim Sermayesi is 1.18 times less risky than Politeknik Metal. It trades about -0.04 of its potential returns per unit of risk. Politeknik Metal Sanayi is currently generating about -0.04 per unit of risk. If you would invest  3,604  in Verusaturk Girisim Sermayesi on December 27, 2024 and sell it today you would lose (304.00) from holding Verusaturk Girisim Sermayesi or give up 8.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Verusaturk Girisim Sermayesi  vs.  Politeknik Metal Sanayi

Verusaturk Girisim

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verusaturk Girisim Sermayesi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

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 latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Verusaturk Girisim and Politeknik Metal

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

The idea behind Verusaturk Girisim Sermayesi and Politeknik Metal Sanayi 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.