Correlation Between Ege Endustri and Tekfen Holding

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

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

Diversification Opportunities for Ege Endustri and Tekfen Holding

0.71

Correlation Coefficient

Ege Endustri  Tekfen Holding

Poor diversification

The 3 months correlation between Ege and Tekfen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve 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 Ege Endustri 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 Ege Endustri ve 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 Ege Endustri i.e., Ege Endustri and Tekfen Holding go up and down completely randomly.

Pair Corralation between Ege Endustri and Tekfen Holding

Assuming the 90 days trading horizon Ege Endustri ve is expected to under-perform the Tekfen Holding. But the stock apears to be less risky and, when comparing its historical volatility, Ege Endustri ve is 1.28 times less risky than Tekfen Holding. The stock trades about -0.14 of its potential returns per unit of risk. The Tekfen Holding AS is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  6,320  in Tekfen Holding AS on December 4, 2024 and sell it today you would earn a total of  845.00  from holding Tekfen Holding AS or generate 13.37% return on investment over 90 days.

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

Ege Endustri ve  vs.  Tekfen Holding AS

Ege Endustri ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ege Endustri ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Tekfen Holding AS

Risk-Adjusted Performance

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 Ege Endustri and Tekfen Holding

The main advantage of trading using opposite Ege Endustri and Tekfen Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ege Endustri 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 Ege Endustri ve 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.