Correlation Between Alkim Alkali and Gentas Genel

Can any of the company-specific risk be diversified away by investing in both Alkim Alkali and Gentas Genel 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 Alkim Alkali and Gentas Genel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alkim Alkali Kimya and Gentas Genel Metal, you can compare the effects of market volatilities on Alkim Alkali and Gentas Genel 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 Alkim Alkali with a short position of Gentas Genel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkim Alkali and Gentas Genel.

Diversification Opportunities for Alkim Alkali and Gentas Genel

0.88

Correlation Coefficient

Alkim Alkali  Gentas Genel

Very poor diversification

The 3 months correlation between Alkim and Gentas is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Alkim Alkali Kimya and Gentas Genel Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentas Genel Metal and Alkim Alkali 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 Alkim Alkali Kimya are associated (or correlated) with Gentas Genel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentas Genel Metal has no effect on the direction of Alkim Alkali i.e., Alkim Alkali and Gentas Genel go up and down completely randomly.

Pair Corralation between Alkim Alkali and Gentas Genel

Assuming the 90 days trading horizon Alkim Alkali is expected to generate 2.65 times less return on investment than Gentas Genel. But when comparing it to its historical volatility, Alkim Alkali Kimya is 1.06 times less risky than Gentas Genel. It trades about 0.07 of its potential returns per unit of risk. Gentas Genel Metal is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  780.00  in Gentas Genel Metal on September 25, 2024 and sell it today you would earn a total of  179.00  from holding Gentas Genel Metal or generate 22.95% return on investment over 90 days.

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

Alkim Alkali Kimya  vs.  Gentas Genel Metal

Alkim Alkali Kimya

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Alkali Kimya are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Alkim Alkali may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gentas Genel Metal

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Alkim Alkali and Gentas Genel

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

The idea behind Alkim Alkali Kimya and Gentas Genel Metal 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.