Correlation Between MEGA METAL and Frigo Pak

Can any of the company-specific risk be diversified away by investing in both MEGA METAL and Frigo Pak 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 MEGA METAL and Frigo Pak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEGA METAL and Frigo Pak Gida Maddeleri, you can compare the effects of market volatilities on MEGA METAL and Frigo Pak 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 MEGA METAL with a short position of Frigo Pak. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEGA METAL and Frigo Pak.

Diversification Opportunities for MEGA METAL and Frigo Pak

-0.54

Correlation Coefficient

MEGA METAL  Frigo Pak

Excellent diversification

The 3 months correlation between MEGA and Frigo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and Frigo Pak Gida Maddeleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frigo Pak Gida and MEGA 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 MEGA METAL are associated (or correlated) with Frigo Pak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frigo Pak Gida has no effect on the direction of MEGA METAL i.e., MEGA METAL and Frigo Pak go up and down completely randomly.

Pair Corralation between MEGA METAL and Frigo Pak

Assuming the 90 days trading horizon MEGA METAL is expected to generate 1.38 times more return on investment than Frigo Pak. However, MEGA METAL is 1.38 times more volatile than Frigo Pak Gida Maddeleri. It trades about 0.03 of its potential returns per unit of risk. Frigo Pak Gida Maddeleri is currently generating about 0.01 per unit of risk. If you would invest  3,112  in MEGA METAL on September 14, 2024 and sell it today you would earn a total of  130.00  from holding MEGA METAL or generate 4.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	50.0%
Values	Daily Returns

MEGA METAL  vs.  Frigo Pak Gida Maddeleri

MEGA METAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEGA METAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

Frigo Pak Gida

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Frigo Pak Gida Maddeleri are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Frigo Pak demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MEGA METAL and Frigo Pak

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

The idea behind MEGA METAL and Frigo Pak Gida Maddeleri 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.