Correlation Between Penta Teknoloji and Euro Menkul

Can any of the company-specific risk be diversified away by investing in both Penta Teknoloji and Euro Menkul 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 Penta Teknoloji and Euro Menkul into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Penta Teknoloji Urunleri and Euro Menkul Kiymet, you can compare the effects of market volatilities on Penta Teknoloji and Euro Menkul 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 Penta Teknoloji with a short position of Euro Menkul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Teknoloji and Euro Menkul.

Diversification Opportunities for Penta Teknoloji and Euro Menkul

0.31

Correlation Coefficient

Penta Teknoloji  Euro Menkul

Weak diversification

The 3 months correlation between Penta and Euro is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Penta Teknoloji Urunleri and Euro Menkul Kiymet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Menkul Kiymet and Penta Teknoloji 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 Penta Teknoloji Urunleri are associated (or correlated) with Euro Menkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Menkul Kiymet has no effect on the direction of Penta Teknoloji i.e., Penta Teknoloji and Euro Menkul go up and down completely randomly.

Pair Corralation between Penta Teknoloji and Euro Menkul

Assuming the 90 days trading horizon Penta Teknoloji is expected to generate 4.35 times less return on investment than Euro Menkul. But when comparing it to its historical volatility, Penta Teknoloji Urunleri is 2.65 times less risky than Euro Menkul. It trades about 0.2 of its potential returns per unit of risk. Euro Menkul Kiymet is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  1,060  in Euro Menkul Kiymet on September 22, 2024 and sell it today you would earn a total of  319.00  from holding Euro Menkul Kiymet or generate 30.09% return on investment over 90 days.

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

Penta Teknoloji Urunleri  vs.  Euro Menkul Kiymet

Penta Teknoloji Urunleri

Risk-Adjusted Performance

2 of 100

Weak

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

Euro Menkul Kiymet

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Euro Menkul Kiymet are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Euro Menkul unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Penta Teknoloji and Euro Menkul

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

The idea behind Penta Teknoloji Urunleri and Euro Menkul Kiymet 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.