Correlation Between Politeknik Metal and Izmir Demir

Can any of the company-specific risk be diversified away by investing in both Politeknik Metal and Izmir Demir 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 Politeknik Metal and Izmir Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Politeknik Metal Sanayi and Izmir Demir Celik, you can compare the effects of market volatilities on Politeknik Metal and Izmir Demir 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 Politeknik Metal with a short position of Izmir Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Politeknik Metal and Izmir Demir.

Diversification Opportunities for Politeknik Metal and Izmir Demir

0.0

Correlation Coefficient

Politeknik Metal  Izmir Demir

Pay attention - limited upside

The 3 months correlation between Politeknik and Izmir is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Politeknik Metal Sanayi and Izmir Demir Celik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Izmir Demir Celik and Politeknik 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 Politeknik Metal Sanayi are associated (or correlated) with Izmir Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Izmir Demir Celik has no effect on the direction of Politeknik Metal i.e., Politeknik Metal and Izmir Demir go up and down completely randomly.

Pair Corralation between Politeknik Metal and Izmir Demir

If you would invest  719,750  in Politeknik Metal Sanayi on September 14, 2024 and sell it today you would lose (13,250) from holding Politeknik Metal Sanayi or give up 1.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Politeknik Metal Sanayi  vs.  Izmir Demir Celik

Politeknik Metal Sanayi

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Politeknik Metal Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Politeknik Metal is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Izmir Demir Celik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Izmir Demir Celik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Izmir Demir is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Politeknik Metal and Izmir Demir

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

The idea behind Politeknik Metal Sanayi and Izmir Demir Celik 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.