Correlation Between Trabzonspor Sportif and Politeknik Metal

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

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

Diversification Opportunities for Trabzonspor Sportif and Politeknik Metal

0.43

Correlation Coefficient

Trabzonspor Sportif  Politeknik Metal

Very weak diversification

The 3 months correlation between Trabzonspor and Politeknik is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Trabzonspor Sportif Yatirim and Politeknik Metal Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Politeknik Metal Sanayi and Trabzonspor Sportif 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 Trabzonspor Sportif Yatirim are associated (or correlated) with Politeknik Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Politeknik Metal Sanayi has no effect on the direction of Trabzonspor Sportif i.e., Trabzonspor Sportif and Politeknik Metal go up and down completely randomly.

Pair Corralation between Trabzonspor Sportif and Politeknik Metal

Assuming the 90 days trading horizon Trabzonspor Sportif Yatirim is expected to under-perform the Politeknik Metal. But the stock apears to be less risky and, when comparing its historical volatility, Trabzonspor Sportif Yatirim is 1.16 times less risky than Politeknik Metal. The stock trades about -0.17 of its potential returns per unit of risk. The Politeknik Metal Sanayi is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  707,750  in Politeknik Metal Sanayi on September 12, 2024 and sell it today you would earn a total of  4,250  from holding Politeknik Metal Sanayi or generate 0.6% return on investment over 90 days.

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

Trabzonspor Sportif Yatirim  vs.  Politeknik Metal Sanayi

Trabzonspor Sportif

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trabzonspor Sportif Yatirim 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.

Politeknik Metal Sanayi

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Politeknik Metal Sanayi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Politeknik Metal is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Trabzonspor Sportif and Politeknik Metal

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

The idea behind Trabzonspor Sportif Yatirim and Politeknik Metal Sanayi 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.