Correlation Between ENKA Insaat and Turk Telekomunikasyon

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

Diversification Opportunities for ENKA Insaat and Turk Telekomunikasyon

0.41

Correlation Coefficient

ENKA Insaat  Turk Telekomunikasyon

Very weak diversification

The 3 months correlation between ENKA and Turk is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ENKA Insaat ve and Turk Telekomunikasyon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turk Telekomunikasyon 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 Turk Telekomunikasyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turk Telekomunikasyon has no effect on the direction of ENKA Insaat i.e., ENKA Insaat and Turk Telekomunikasyon go up and down completely randomly.

Pair Corralation between ENKA Insaat and Turk Telekomunikasyon

Assuming the 90 days trading horizon ENKA Insaat ve is expected to generate 0.62 times more return on investment than Turk Telekomunikasyon. However, ENKA Insaat ve is 1.6 times less risky than Turk Telekomunikasyon. It trades about 0.46 of its potential returns per unit of risk. Turk Telekomunikasyon AS is currently generating about 0.0 per unit of risk. If you would invest  4,928  in ENKA Insaat ve on December 29, 2024 and sell it today you would earn a total of  1,437  from holding ENKA Insaat ve or generate 29.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

ENKA Insaat ve  vs.  Turk Telekomunikasyon AS

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 13 (%) 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.

Turk Telekomunikasyon

Risk-Adjusted Performance

Modest

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

Pair Trading with ENKA Insaat and Turk Telekomunikasyon

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

The idea behind ENKA Insaat ve and Turk Telekomunikasyon 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.