Correlation Between Burcelik Bursa and Turkish Airlines

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

By analyzing existing cross correlation between Burcelik Bursa Celik and Turkish Airlines, you can compare the effects of market volatilities on Burcelik Bursa 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 Burcelik Bursa with a short position of Turkish Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burcelik Bursa and Turkish Airlines.

Diversification Opportunities for Burcelik Bursa and Turkish Airlines

-0.73

Correlation Coefficient

Burcelik Bursa  Turkish Airlines

Pay attention - limited upside

The 3 months correlation between Burcelik and Turkish is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Burcelik Bursa Celik and Turkish Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkish Airlines and Burcelik Bursa 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 Burcelik Bursa Celik 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 Burcelik Bursa i.e., Burcelik Bursa and Turkish Airlines go up and down completely randomly.

Pair Corralation between Burcelik Bursa and Turkish Airlines

Assuming the 90 days trading horizon Burcelik Bursa Celik is expected to under-perform the Turkish Airlines. In addition to that, Burcelik Bursa is 2.73 times more volatile than Turkish Airlines. It trades about -0.05 of its total potential returns per unit of risk. Turkish Airlines is currently generating about -0.08 per unit of volatility. If you would invest  29,400  in Turkish Airlines on September 27, 2024 and sell it today you would lose (575.00) from holding Turkish Airlines or give up 1.96% of portfolio value over 90 days.

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

Burcelik Bursa Celik  vs.  Turkish Airlines

Burcelik Bursa Celik

Risk-Adjusted Performance

0 of 100

Very Weak

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

Turkish Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Burcelik Bursa and Turkish Airlines

The main advantage of trading using opposite Burcelik Bursa and Turkish Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burcelik Bursa 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 Burcelik Bursa Celik 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.