Correlation Between Desa Deri and Turkiye Halk

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

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

Diversification Opportunities for Desa Deri and Turkiye Halk

0.44

Correlation Coefficient

Desa Deri  Turkiye Halk

Very weak diversification

The 3 months correlation between Desa and Turkiye is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Desa Deri Sanayi and Turkiye Halk Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Halk Bankasi and Desa Deri 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 Desa Deri Sanayi are associated (or correlated) with Turkiye Halk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Halk Bankasi has no effect on the direction of Desa Deri i.e., Desa Deri and Turkiye Halk go up and down completely randomly.

Pair Corralation between Desa Deri and Turkiye Halk

Assuming the 90 days trading horizon Desa Deri Sanayi is expected to generate 1.51 times more return on investment than Turkiye Halk. However, Desa Deri is 1.51 times more volatile than Turkiye Halk Bankasi. It trades about 0.03 of its potential returns per unit of risk. Turkiye Halk Bankasi is currently generating about -0.03 per unit of risk. If you would invest  2,030  in Desa Deri Sanayi on September 5, 2024 and sell it today you would earn a total of  54.00  from holding Desa Deri Sanayi or generate 2.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Desa Deri Sanayi  vs.  Turkiye Halk Bankasi

Desa Deri Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Desa Deri Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Desa Deri is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Turkiye Halk Bankasi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Desa Deri and Turkiye Halk

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

The idea behind Desa Deri Sanayi and Turkiye Halk 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.