Correlation Between Eregli Demir and Turkcell Iletisim

Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Turkcell Iletisim 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 Eregli Demir and Turkcell Iletisim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eregli Demir ve and Turkcell Iletisim Hizmetleri, you can compare the effects of market volatilities on Eregli Demir and Turkcell Iletisim 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 Eregli Demir with a short position of Turkcell Iletisim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Turkcell Iletisim.

Diversification Opportunities for Eregli Demir and Turkcell Iletisim

-0.78

Correlation Coefficient

Eregli Demir  Turkcell Iletisim

Pay attention - limited upside

The 3 months correlation between Eregli and Turkcell is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Turkcell Iletisim Hizmetleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkcell Iletisim and Eregli Demir 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 Eregli Demir ve are associated (or correlated) with Turkcell Iletisim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkcell Iletisim has no effect on the direction of Eregli Demir i.e., Eregli Demir and Turkcell Iletisim go up and down completely randomly.

Pair Corralation between Eregli Demir and Turkcell Iletisim

Assuming the 90 days trading horizon Eregli Demir ve is expected to under-perform the Turkcell Iletisim. But the stock apears to be less risky and, when comparing its historical volatility, Eregli Demir ve is 1.05 times less risky than Turkcell Iletisim. The stock trades about -0.14 of its potential returns per unit of risk. The Turkcell Iletisim Hizmetleri is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  9,105  in Turkcell Iletisim Hizmetleri on December 3, 2024 and sell it today you would earn a total of  965.00  from holding Turkcell Iletisim Hizmetleri or generate 10.6% return on investment over 90 days.

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

Eregli Demir ve  vs.  Turkcell Iletisim Hizmetleri

Eregli Demir ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eregli Demir ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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.

Turkcell Iletisim

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turkcell Iletisim Hizmetleri are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkcell Iletisim may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Eregli Demir and Turkcell Iletisim

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

The idea behind Eregli Demir ve and Turkcell Iletisim Hizmetleri 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 Anywhere module to track or share privately all of your investments from the convenience of any device.