Correlation Between Ooma and Turkcell Iletisim

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

By analyzing existing cross correlation between Ooma Inc and Turkcell Iletisim Hizmetleri, you can compare the effects of market volatilities on Ooma and Turkcell Iletisim 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 Ooma with a short position of Turkcell Iletisim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ooma and Turkcell Iletisim.

Diversification Opportunities for Ooma and Turkcell Iletisim

0.56

Correlation Coefficient

Ooma  Turkcell Iletisim

Very weak diversification

The 3 months correlation between Ooma and Turkcell is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ooma Inc and Turkcell Iletisim Hizmetleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkcell Iletisim and Ooma 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 Ooma Inc are associated (or correlated) with Turkcell Iletisim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkcell Iletisim has no effect on the direction of Ooma i.e., Ooma and Turkcell Iletisim go up and down completely randomly.

Pair Corralation between Ooma and Turkcell Iletisim

Given the investment horizon of 90 days Ooma Inc is expected to under-perform the Turkcell Iletisim. But the stock apears to be less risky and, when comparing its historical volatility, Ooma Inc is 1.56 times less risky than Turkcell Iletisim. The stock trades about -0.07 of its potential returns per unit of risk. The Turkcell Iletisim Hizmetleri is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  657.00  in Turkcell Iletisim Hizmetleri on December 28, 2024 and sell it today you would lose (35.00) from holding Turkcell Iletisim Hizmetleri or give up 5.33% of portfolio value over 90 days.

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

Ooma Inc  vs.  Turkcell Iletisim Hizmetleri

Ooma Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ooma Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Turkcell Iletisim

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkcell Iletisim Hizmetleri has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Turkcell Iletisim is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ooma and Turkcell Iletisim

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

The idea behind Ooma Inc and Turkcell Iletisim Hizmetleri 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.