Correlation Between Turkiye Is and Turkish Airlines

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

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

Diversification Opportunities for Turkiye Is and Turkish Airlines

0.63

Correlation Coefficient

Turkiye Is  Turkish Airlines

Poor diversification

The 3 months correlation between Turkiye and Turkish is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Is Bankasi and Turkish Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkish Airlines and Turkiye Is 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 Turkiye Is Bankasi 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 Turkiye Is i.e., Turkiye Is and Turkish Airlines go up and down completely randomly.

Pair Corralation between Turkiye Is and Turkish Airlines

Assuming the 90 days trading horizon Turkiye Is Bankasi is expected to under-perform the Turkish Airlines. In addition to that, Turkiye Is is 1.3 times more volatile than Turkish Airlines. It trades about -0.03 of its total potential returns per unit of risk. Turkish Airlines is currently generating about 0.08 per unit of volatility. If you would invest  28,225  in Turkish Airlines on December 29, 2024 and sell it today you would earn a total of  2,875  from holding Turkish Airlines or generate 10.19% return on investment over 90 days.

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

Turkiye Is Bankasi  vs.  Turkish Airlines

Turkiye Is Bankasi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkiye Is Bankasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Turkiye Is is not utilizing all of its potentials. The recent 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 6 (%) 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 April 2025.

Pair Trading with Turkiye Is and Turkish Airlines

The main advantage of trading using opposite Turkiye Is and Turkish Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Is 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 Turkiye Is Bankasi 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.