Correlation Between Petkim Petrokimya and Emlak Konut

Can any of the company-specific risk be diversified away by investing in both Petkim Petrokimya and Emlak Konut 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 Petkim Petrokimya and Emlak Konut into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Petkim Petrokimya Holding and Emlak Konut Gayrimenkul, you can compare the effects of market volatilities on Petkim Petrokimya and Emlak Konut 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 Petkim Petrokimya with a short position of Emlak Konut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petkim Petrokimya and Emlak Konut.

Diversification Opportunities for Petkim Petrokimya and Emlak Konut

0.17

Correlation Coefficient

Petkim Petrokimya  Emlak Konut

Average diversification

The 3 months correlation between Petkim and Emlak is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding and Emlak Konut Gayrimenkul in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emlak Konut Gayrimenkul and Petkim Petrokimya 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 Petkim Petrokimya Holding are associated (or correlated) with Emlak Konut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emlak Konut Gayrimenkul has no effect on the direction of Petkim Petrokimya i.e., Petkim Petrokimya and Emlak Konut go up and down completely randomly.

Pair Corralation between Petkim Petrokimya and Emlak Konut

Assuming the 90 days trading horizon Petkim Petrokimya is expected to generate 4.02 times less return on investment than Emlak Konut. But when comparing it to its historical volatility, Petkim Petrokimya Holding is 1.85 times less risky than Emlak Konut. It trades about 0.11 of its potential returns per unit of risk. Emlak Konut Gayrimenkul is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,164  in Emlak Konut Gayrimenkul on September 15, 2024 and sell it today you would earn a total of  208.00  from holding Emlak Konut Gayrimenkul or generate 17.87% return on investment over 90 days.

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

Petkim Petrokimya Holding  vs.  Emlak Konut Gayrimenkul

Petkim Petrokimya Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petkim Petrokimya Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Emlak Konut Gayrimenkul

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Emlak Konut Gayrimenkul are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Emlak Konut demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Petkim Petrokimya and Emlak Konut

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

The idea behind Petkim Petrokimya Holding and Emlak Konut Gayrimenkul 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.