Correlation Between ENKA Insaat and Turkish Airlines

Can any of the company-specific risk be diversified away by investing in both ENKA Insaat 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 ENKA Insaat and Turkish Airlines 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 Turkish Airlines, you can compare the effects of market volatilities on ENKA Insaat 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 ENKA Insaat with a short position of Turkish Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENKA Insaat and Turkish Airlines.

Diversification Opportunities for ENKA Insaat and Turkish Airlines

-0.13

Correlation Coefficient

ENKA Insaat  Turkish Airlines

Good diversification

The 3 months correlation between ENKA and Turkish is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding ENKA Insaat ve and Turkish Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkish Airlines 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 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 ENKA Insaat i.e., ENKA Insaat and Turkish Airlines go up and down completely randomly.

Pair Corralation between ENKA Insaat and Turkish Airlines

Assuming the 90 days trading horizon ENKA Insaat ve is expected to under-perform the Turkish Airlines. In addition to that, ENKA Insaat is 1.54 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 0.07 per unit of volatility. If you would invest  28,725  in Turkish Airlines on November 28, 2024 and sell it today you would earn a total of  1,750  from holding Turkish Airlines or generate 6.09% return on investment over 90 days.

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

ENKA Insaat ve  vs.  Turkish Airlines

ENKA Insaat ve

Risk-Adjusted Performance

Very Weak

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

Turkish Airlines

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turkish Airlines are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkish Airlines may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with ENKA Insaat and Turkish Airlines

The main advantage of trading using opposite ENKA Insaat and Turkish Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENKA Insaat 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 ENKA Insaat ve 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.