Correlation Between Pegasus Hava and Aselsan Elektronik

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

By analyzing existing cross correlation between Pegasus Hava Tasimaciligi and Aselsan Elektronik Sanayi, you can compare the effects of market volatilities on Pegasus Hava and Aselsan Elektronik 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 Pegasus Hava with a short position of Aselsan Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pegasus Hava and Aselsan Elektronik.

Diversification Opportunities for Pegasus Hava and Aselsan Elektronik

0.62

Correlation Coefficient

Pegasus Hava  Aselsan Elektronik

Poor diversification

The 3 months correlation between Pegasus and Aselsan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pegasus Hava Tasimaciligi and Aselsan Elektronik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aselsan Elektronik Sanayi and Pegasus Hava 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 Pegasus Hava Tasimaciligi are associated (or correlated) with Aselsan Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aselsan Elektronik Sanayi has no effect on the direction of Pegasus Hava i.e., Pegasus Hava and Aselsan Elektronik go up and down completely randomly.

Pair Corralation between Pegasus Hava and Aselsan Elektronik

Assuming the 90 days trading horizon Pegasus Hava is expected to generate 2.81 times less return on investment than Aselsan Elektronik. But when comparing it to its historical volatility, Pegasus Hava Tasimaciligi is 1.26 times less risky than Aselsan Elektronik. It trades about 0.12 of its potential returns per unit of risk. Aselsan Elektronik Sanayi is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  7,030  in Aselsan Elektronik Sanayi on December 4, 2024 and sell it today you would earn a total of  2,775  from holding Aselsan Elektronik Sanayi or generate 39.47% return on investment over 90 days.

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

Pegasus Hava Tasimaciligi  vs.  Aselsan Elektronik Sanayi

Pegasus Hava Tasimaciligi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pegasus Hava Tasimaciligi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Pegasus Hava may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aselsan Elektronik Sanayi

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aselsan Elektronik Sanayi are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Aselsan Elektronik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pegasus Hava and Aselsan Elektronik

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

The idea behind Pegasus Hava Tasimaciligi and Aselsan Elektronik Sanayi 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .