Correlation Between Kent Gida and Penguen Gida

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

By analyzing existing cross correlation between Kent Gida Maddeleri and Penguen Gida Sanayi, you can compare the effects of market volatilities on Kent Gida and Penguen Gida 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 Kent Gida with a short position of Penguen Gida. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kent Gida and Penguen Gida.

Diversification Opportunities for Kent Gida and Penguen Gida

0.63

Correlation Coefficient

Kent Gida  Penguen Gida

Poor diversification

The 3 months correlation between Kent and Penguen is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kent Gida Maddeleri and Penguen Gida Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penguen Gida Sanayi and Kent 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 Kent Gida Maddeleri are associated (or correlated) with Penguen Gida. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penguen Gida Sanayi has no effect on the direction of Kent Gida i.e., Kent Gida and Penguen Gida go up and down completely randomly.

Pair Corralation between Kent Gida and Penguen Gida

Assuming the 90 days trading horizon Kent Gida Maddeleri is expected to under-perform the Penguen Gida. In addition to that, Kent Gida is 1.75 times more volatile than Penguen Gida Sanayi. It trades about -0.03 of its total potential returns per unit of risk. Penguen Gida Sanayi is currently generating about -0.04 per unit of volatility. If you would invest  846.00  in Penguen Gida Sanayi on September 24, 2024 and sell it today you would lose (164.00) from holding Penguen Gida Sanayi or give up 19.39% of portfolio value over 90 days.

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

Kent Gida Maddeleri  vs.  Penguen Gida Sanayi

Kent Gida Maddeleri

Risk-Adjusted Performance

7 of 100

Modest

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

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.

Pair Trading with Kent Gida and Penguen Gida

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

The idea behind Kent Gida Maddeleri and Penguen Gida 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 Global Correlations module to find global opportunities by holding instruments from different markets.