Correlation Between Penguen Gida and Zedur Enerji

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

Diversification Opportunities for Penguen Gida and Zedur Enerji

0.69

Correlation Coefficient

Penguen Gida  Zedur Enerji

Poor diversification

The 3 months correlation between Penguen and Zedur is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Penguen Gida 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 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 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 Penguen Gida i.e., Penguen Gida and Zedur Enerji go up and down completely randomly.

Pair Corralation between Penguen Gida and Zedur Enerji

Assuming the 90 days trading horizon Penguen Gida Sanayi is expected to generate 0.85 times more return on investment than Zedur Enerji. However, Penguen Gida Sanayi is 1.17 times less risky than Zedur Enerji. It trades about 0.03 of its potential returns per unit of risk. Zedur Enerji Elektrik is currently generating about -0.05 per unit of risk. If you would invest  661.00  in Penguen Gida Sanayi on September 23, 2024 and sell it today you would earn a total of  21.00  from holding Penguen Gida Sanayi or generate 3.18% return on investment over 90 days.

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

Penguen Gida Sanayi  vs.  Zedur Enerji Elektrik

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.

Zedur Enerji Elektrik

Risk-Adjusted Performance

0 of 100

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 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 Penguen Gida and Zedur Enerji

The main advantage of trading using opposite Penguen Gida and Zedur Enerji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penguen Gida 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 Penguen Gida 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.