Correlation Between Pergamon Status and Koza Anadolu

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

By analyzing existing cross correlation between Pergamon Status Dis and Koza Anadolu Metal, you can compare the effects of market volatilities on Pergamon Status and Koza Anadolu 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 Pergamon Status with a short position of Koza Anadolu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pergamon Status and Koza Anadolu.

Diversification Opportunities for Pergamon Status and Koza Anadolu

-0.19

Correlation Coefficient

Pergamon Status  Koza Anadolu

Good diversification

The 3 months correlation between Pergamon and Koza is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pergamon Status Dis and Koza Anadolu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koza Anadolu Metal and Pergamon Status 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 Pergamon Status Dis are associated (or correlated) with Koza Anadolu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koza Anadolu Metal has no effect on the direction of Pergamon Status i.e., Pergamon Status and Koza Anadolu go up and down completely randomly.

Pair Corralation between Pergamon Status and Koza Anadolu

Assuming the 90 days trading horizon Pergamon Status Dis is expected to generate 2.34 times more return on investment than Koza Anadolu. However, Pergamon Status is 2.34 times more volatile than Koza Anadolu Metal. It trades about 0.18 of its potential returns per unit of risk. Koza Anadolu Metal is currently generating about 0.34 per unit of risk. If you would invest  11,800  in Pergamon Status Dis on February 2, 2024 and sell it today you would earn a total of  1,790  from holding Pergamon Status Dis or generate 15.17% return on investment over 90 days.

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

Pergamon Status Dis  vs.  Koza Anadolu Metal

Pergamon Status Dis

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pergamon Status Dis are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, Pergamon Status demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Koza Anadolu Metal

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Koza Anadolu Metal are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Koza Anadolu may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Pergamon Status and Koza Anadolu

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

The idea behind Pergamon Status Dis and Koza Anadolu Metal 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.