Correlation Between Arcelik AS and Tekfen Holding

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

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

Diversification Opportunities for Arcelik AS and Tekfen Holding

0.24

Correlation Coefficient

Arcelik AS  Tekfen Holding

Modest diversification

The 3 months correlation between Arcelik and Tekfen is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Arcelik AS and Tekfen Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekfen Holding AS and Arcelik AS 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 Arcelik AS are associated (or correlated) with Tekfen Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekfen Holding AS has no effect on the direction of Arcelik AS i.e., Arcelik AS and Tekfen Holding go up and down completely randomly.

Pair Corralation between Arcelik AS and Tekfen Holding

Assuming the 90 days trading horizon Arcelik AS is expected to generate 0.69 times more return on investment than Tekfen Holding. However, Arcelik AS is 1.45 times less risky than Tekfen Holding. It trades about -0.07 of its potential returns per unit of risk. Tekfen Holding AS is currently generating about -0.05 per unit of risk. If you would invest  14,020  in Arcelik AS on October 22, 2024 and sell it today you would lose (1,220) from holding Arcelik AS or give up 8.7% of portfolio value over 90 days.

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

Arcelik AS  vs.  Tekfen Holding AS

Arcelik AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcelik AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Tekfen Holding AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tekfen Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Arcelik AS and Tekfen Holding

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

The idea behind Arcelik AS and Tekfen Holding AS 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.