Correlation Between Birlik Mensucat and Turkiye Vakiflar

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

By analyzing existing cross correlation between Birlik Mensucat Ticaret and Turkiye Vakiflar Bankasi, you can compare the effects of market volatilities on Birlik Mensucat and Turkiye Vakiflar 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 Birlik Mensucat with a short position of Turkiye Vakiflar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birlik Mensucat and Turkiye Vakiflar.

Diversification Opportunities for Birlik Mensucat and Turkiye Vakiflar

-0.32

Correlation Coefficient

Birlik Mensucat  Turkiye Vakiflar

Very good diversification

The 3 months correlation between Birlik and Turkiye is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Birlik Mensucat Ticaret and Turkiye Vakiflar Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Vakiflar Bankasi and Birlik Mensucat 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 Birlik Mensucat Ticaret are associated (or correlated) with Turkiye Vakiflar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Vakiflar Bankasi has no effect on the direction of Birlik Mensucat i.e., Birlik Mensucat and Turkiye Vakiflar go up and down completely randomly.

Pair Corralation between Birlik Mensucat and Turkiye Vakiflar

Assuming the 90 days trading horizon Birlik Mensucat Ticaret is expected to under-perform the Turkiye Vakiflar. But the stock apears to be less risky and, when comparing its historical volatility, Birlik Mensucat Ticaret is 1.04 times less risky than Turkiye Vakiflar. The stock trades about -0.02 of its potential returns per unit of risk. The Turkiye Vakiflar Bankasi is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,294  in Turkiye Vakiflar Bankasi on December 24, 2024 and sell it today you would earn a total of  82.00  from holding Turkiye Vakiflar Bankasi or generate 3.57% return on investment over 90 days.

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

Birlik Mensucat Ticaret  vs.  Turkiye Vakiflar Bankasi

Birlik Mensucat Ticaret

Risk-Adjusted Performance

Very Weak

Over the last 90 days Birlik Mensucat Ticaret has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Birlik Mensucat is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Turkiye Vakiflar Bankasi

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Vakiflar Bankasi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turkiye Vakiflar is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Birlik Mensucat and Turkiye Vakiflar

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

The idea behind Birlik Mensucat Ticaret and Turkiye Vakiflar Bankasi 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.