Correlation Between Is Yatirim and Turkish Airlines

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

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

Diversification Opportunities for Is Yatirim and Turkish Airlines

0.79

Correlation Coefficient

Is Yatirim  Turkish Airlines

Poor diversification

The 3 months correlation between ISYAT and Turkish is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Is Yatirim Ortakligi and Turkish Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkish Airlines and Is Yatirim 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 Is Yatirim Ortakligi 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 Is Yatirim i.e., Is Yatirim and Turkish Airlines go up and down completely randomly.

Pair Corralation between Is Yatirim and Turkish Airlines

Assuming the 90 days trading horizon Is Yatirim Ortakligi is expected to generate 1.59 times more return on investment than Turkish Airlines. However, Is Yatirim is 1.59 times more volatile than Turkish Airlines. It trades about -0.01 of its potential returns per unit of risk. Turkish Airlines is currently generating about -0.05 per unit of risk. If you would invest  889.00  in Is Yatirim Ortakligi on August 30, 2024 and sell it today you would lose (33.00) from holding Is Yatirim Ortakligi or give up 3.71% of portfolio value over 90 days.

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

Is Yatirim Ortakligi  vs.  Turkish Airlines

Is Yatirim Ortakligi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Is Yatirim Ortakligi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Is Yatirim 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

0 of 100

Very Weak

Over the last 90 days Turkish Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Is Yatirim and Turkish Airlines

The main advantage of trading using opposite Is Yatirim and Turkish Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Is Yatirim 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 Is Yatirim Ortakligi 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.