Correlation Between Borlease Otomotiv and Turkish Airlines

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Can any of the company-specific risk be diversified away by investing in both Borlease Otomotiv and Turkish Airlines 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 Borlease Otomotiv and Turkish Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borlease Otomotiv AS and Turkish Airlines, you can compare the effects of market volatilities on Borlease Otomotiv and Turkish Airlines 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 Borlease Otomotiv with a short position of Turkish Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borlease Otomotiv and Turkish Airlines.

Diversification Opportunities for Borlease Otomotiv and Turkish Airlines

0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between Borlease and Turkish is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Borlease Otomotiv AS and Turkish Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkish Airlines and Borlease Otomotiv 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 Borlease Otomotiv AS are associated (or correlated) with Turkish Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkish Airlines has no effect on the direction of Borlease Otomotiv i.e., Borlease Otomotiv and Turkish Airlines go up and down completely randomly.

Pair Corralation between Borlease Otomotiv and Turkish Airlines

Assuming the 90 days trading horizon Borlease Otomotiv AS is expected to generate 1.43 times more return on investment than Turkish Airlines. However, Borlease Otomotiv is 1.43 times more volatile than Turkish Airlines. It trades about 0.32 of its potential returns per unit of risk. Turkish Airlines is currently generating about 0.13 per unit of risk. If you would invest  4,178  in Borlease Otomotiv AS on October 12, 2024 and sell it today you would earn a total of  2,577  from holding Borlease Otomotiv AS or generate 61.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Borlease Otomotiv AS  vs.  Turkish Airlines

 Performance 
       Timeline  
Borlease Otomotiv 

Risk-Adjusted Performance

25 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Borlease Otomotiv AS are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Borlease Otomotiv demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Turkish Airlines 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Turkish Airlines are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkish Airlines demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Borlease Otomotiv and Turkish Airlines Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Borlease Otomotiv and Turkish Airlines

The main advantage of trading using opposite Borlease Otomotiv and Turkish Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borlease Otomotiv position performs unexpectedly, Turkish Airlines 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 Turkish Airlines will offset losses from the drop in Turkish Airlines' long position.
The idea behind Borlease Otomotiv AS and Turkish Airlines 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.
Check out your portfolio center.
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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