Correlation Between Penguen Gida and AK Sigorta

Can any of the company-specific risk be diversified away by investing in both Penguen Gida and AK Sigorta 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 Penguen Gida and AK Sigorta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Penguen Gida Sanayi and AK Sigorta AS, you can compare the effects of market volatilities on Penguen Gida and AK Sigorta 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 Penguen Gida with a short position of AK Sigorta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penguen Gida and AK Sigorta.

Diversification Opportunities for Penguen Gida and AK Sigorta

0.89

Correlation Coefficient

Penguen Gida  AK Sigorta

Very poor diversification

The 3 months correlation between Penguen and AKGRT is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Penguen Gida Sanayi and AK Sigorta AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AK Sigorta AS and Penguen Gida 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 Penguen Gida Sanayi are associated (or correlated) with AK Sigorta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AK Sigorta AS has no effect on the direction of Penguen Gida i.e., Penguen Gida and AK Sigorta go up and down completely randomly.

Pair Corralation between Penguen Gida and AK Sigorta

Assuming the 90 days trading horizon Penguen Gida is expected to generate 4.89 times less return on investment than AK Sigorta. But when comparing it to its historical volatility, Penguen Gida Sanayi is 1.32 times less risky than AK Sigorta. It trades about 0.03 of its potential returns per unit of risk. AK Sigorta AS is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  575.00  in AK Sigorta AS on September 22, 2024 and sell it today you would earn a total of  120.00  from holding AK Sigorta AS or generate 20.87% return on investment over 90 days.

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

Penguen Gida Sanayi  vs.  AK Sigorta AS

Penguen Gida Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Penguen Gida Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Penguen Gida is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

AK Sigorta AS

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AK Sigorta AS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, AK Sigorta demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Penguen Gida and AK Sigorta

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

The idea behind Penguen Gida Sanayi and AK Sigorta AS 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.