Correlation Between ENKA Insaat and Turkiye Kalkinma

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

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

Diversification Opportunities for ENKA Insaat and Turkiye Kalkinma

-0.61

Correlation Coefficient

ENKA Insaat  Turkiye Kalkinma

Excellent diversification

The 3 months correlation between ENKA and Turkiye is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ENKA Insaat ve and Turkiye Kalkinma Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Kalkinma Bankasi and ENKA Insaat 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 ENKA Insaat ve are associated (or correlated) with Turkiye Kalkinma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Kalkinma Bankasi has no effect on the direction of ENKA Insaat i.e., ENKA Insaat and Turkiye Kalkinma go up and down completely randomly.

Pair Corralation between ENKA Insaat and Turkiye Kalkinma

Assuming the 90 days trading horizon ENKA Insaat ve is expected to generate 1.11 times more return on investment than Turkiye Kalkinma. However, ENKA Insaat is 1.11 times more volatile than Turkiye Kalkinma Bankasi. It trades about 0.16 of its potential returns per unit of risk. Turkiye Kalkinma Bankasi is currently generating about -0.07 per unit of risk. If you would invest  5,035  in ENKA Insaat ve on December 28, 2024 and sell it today you would earn a total of  1,270  from holding ENKA Insaat ve or generate 25.22% return on investment over 90 days.

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

ENKA Insaat ve  vs.  Turkiye Kalkinma Bankasi

ENKA Insaat ve

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ENKA Insaat ve are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, ENKA Insaat demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Turkiye Kalkinma Bankasi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkiye Kalkinma Bankasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 ENKA Insaat and Turkiye Kalkinma

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

The idea behind ENKA Insaat ve and Turkiye Kalkinma 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.