Correlation Between Makina Takim and Turkiye Kalkinma

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

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

Diversification Opportunities for Makina Takim and Turkiye Kalkinma

-0.43

Correlation Coefficient

Makina Takim  Turkiye Kalkinma

Very good diversification

The 3 months correlation between Makina and Turkiye is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Makina Takim Endustrisi and Turkiye Kalkinma Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Kalkinma Bankasi and Makina Takim 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 Makina Takim Endustrisi are associated (or correlated) with Turkiye Kalkinma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Kalkinma Bankasi has no effect on the direction of Makina Takim i.e., Makina Takim and Turkiye Kalkinma go up and down completely randomly.

Pair Corralation between Makina Takim and Turkiye Kalkinma

Assuming the 90 days trading horizon Makina Takim Endustrisi is expected to generate 2.51 times more return on investment than Turkiye Kalkinma. However, Makina Takim is 2.51 times more volatile than Turkiye Kalkinma Bankasi. It trades about 0.1 of its potential returns per unit of risk. Turkiye Kalkinma Bankasi is currently generating about -0.23 per unit of risk. If you would invest  677.00  in Makina Takim Endustrisi on October 8, 2024 and sell it today you would earn a total of  42.00  from holding Makina Takim Endustrisi or generate 6.2% return on investment over 90 days.

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

Makina Takim Endustrisi  vs.  Turkiye Kalkinma Bankasi

Makina Takim Endustrisi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Makina Takim Endustrisi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Makina Takim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Turkiye Kalkinma Bankasi

Risk-Adjusted Performance

0 of 100

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 fairly strong forward indicators, Turkiye Kalkinma is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Makina Takim and Turkiye Kalkinma

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

The idea behind Makina Takim Endustrisi and Turkiye Kalkinma Bankasi 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.