Correlation Between Hedef Girisim and Tofas Turk

Can any of the company-specific risk be diversified away by investing in both Hedef Girisim and Tofas Turk 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 Hedef Girisim and Tofas Turk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hedef Girisim Sermayesi and Tofas Turk Otomobil, you can compare the effects of market volatilities on Hedef Girisim and Tofas Turk 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 Hedef Girisim with a short position of Tofas Turk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hedef Girisim and Tofas Turk.

Diversification Opportunities for Hedef Girisim and Tofas Turk

0.67

Correlation Coefficient

Hedef Girisim  Tofas Turk

Poor diversification

The 3 months correlation between Hedef and Tofas is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hedef Girisim Sermayesi and Tofas Turk Otomobil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tofas Turk Otomobil and Hedef Girisim 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 Hedef Girisim Sermayesi are associated (or correlated) with Tofas Turk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tofas Turk Otomobil has no effect on the direction of Hedef Girisim i.e., Hedef Girisim and Tofas Turk go up and down completely randomly.

Pair Corralation between Hedef Girisim and Tofas Turk

Assuming the 90 days trading horizon Hedef Girisim Sermayesi is expected to generate 1.73 times more return on investment than Tofas Turk. However, Hedef Girisim is 1.73 times more volatile than Tofas Turk Otomobil. It trades about 0.23 of its potential returns per unit of risk. Tofas Turk Otomobil is currently generating about 0.25 per unit of risk. If you would invest  154.00  in Hedef Girisim Sermayesi on October 21, 2024 and sell it today you would earn a total of  25.00  from holding Hedef Girisim Sermayesi or generate 16.23% return on investment over 90 days.

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

Hedef Girisim Sermayesi  vs.  Tofas Turk Otomobil

Hedef Girisim Sermayesi

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hedef Girisim Sermayesi are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Hedef Girisim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Tofas Turk Otomobil

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tofas Turk Otomobil are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Tofas Turk may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hedef Girisim and Tofas Turk

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

The idea behind Hedef Girisim Sermayesi and Tofas Turk Otomobil 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.