Correlation Between Turkiye Kalkinma and IZDEMIR Enerji

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

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

Diversification Opportunities for Turkiye Kalkinma and IZDEMIR Enerji

-0.14

Correlation Coefficient

Turkiye Kalkinma  IZDEMIR Enerji

Good diversification

The 3 months correlation between Turkiye and IZDEMIR is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Kalkinma Bankasi and IZDEMIR Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IZDEMIR Enerji Elektrik and Turkiye Kalkinma 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 Kalkinma Bankasi are associated (or correlated) with IZDEMIR Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IZDEMIR Enerji Elektrik has no effect on the direction of Turkiye Kalkinma i.e., Turkiye Kalkinma and IZDEMIR Enerji go up and down completely randomly.

Pair Corralation between Turkiye Kalkinma and IZDEMIR Enerji

Assuming the 90 days trading horizon Turkiye Kalkinma Bankasi is expected to under-perform the IZDEMIR Enerji. But the stock apears to be less risky and, when comparing its historical volatility, Turkiye Kalkinma Bankasi is 1.48 times less risky than IZDEMIR Enerji. The stock trades about -0.1 of its potential returns per unit of risk. The IZDEMIR Enerji Elektrik is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  475.00  in IZDEMIR Enerji Elektrik on December 25, 2024 and sell it today you would lose (7.00) from holding IZDEMIR Enerji Elektrik or give up 1.47% of portfolio value over 90 days.

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

Turkiye Kalkinma Bankasi  vs.  IZDEMIR Enerji Elektrik

Turkiye Kalkinma Bankasi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkiye Kalkinma Bankasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

IZDEMIR Enerji Elektrik

Risk-Adjusted Performance

Weak

Over the last 90 days IZDEMIR Enerji Elektrik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, IZDEMIR Enerji is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Turkiye Kalkinma and IZDEMIR Enerji

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

The idea behind Turkiye Kalkinma Bankasi and IZDEMIR Enerji Elektrik 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.