Correlation Between GSD Holding and Turkish Airlines

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

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

Diversification Opportunities for GSD Holding and Turkish Airlines

0.88

Correlation Coefficient

GSD Holding  Turkish Airlines

Very poor diversification

The 3 months correlation between GSD and Turkish is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding GSD Holding AS and Turkish Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkish Airlines and GSD Holding 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 GSD Holding AS 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 GSD Holding i.e., GSD Holding and Turkish Airlines go up and down completely randomly.

Pair Corralation between GSD Holding and Turkish Airlines

Assuming the 90 days trading horizon GSD Holding is expected to generate 2.53 times less return on investment than Turkish Airlines. In addition to that, GSD Holding is 1.1 times more volatile than Turkish Airlines. It trades about 0.02 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  13,470  in Turkish Airlines on October 4, 2024 and sell it today you would earn a total of  14,630  from holding Turkish Airlines or generate 108.61% return on investment over 90 days.

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

GSD Holding AS  vs.  Turkish Airlines

GSD Holding AS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GSD Holding AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, GSD Holding may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Turkish Airlines

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkish Airlines are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turkish Airlines is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with GSD Holding and Turkish Airlines

The main advantage of trading using opposite GSD Holding and Turkish Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSD Holding 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 GSD Holding AS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.