Correlation Between Pegasus Hava and TAV Havalimanlari

Can any of the company-specific risk be diversified away by investing in both Pegasus Hava and TAV Havalimanlari 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 TAV Havalimanlari 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 TAV Havalimanlari Holding, you can compare the effects of market volatilities on Pegasus Hava and TAV Havalimanlari 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 TAV Havalimanlari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pegasus Hava and TAV Havalimanlari.

Diversification Opportunities for Pegasus Hava and TAV Havalimanlari

-0.57

Correlation Coefficient

Pegasus Hava  TAV Havalimanlari

Excellent diversification

The 3 months correlation between Pegasus and TAV is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pegasus Hava Tasimaciligi and TAV Havalimanlari Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAV Havalimanlari Holding 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 TAV Havalimanlari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAV Havalimanlari Holding has no effect on the direction of Pegasus Hava i.e., Pegasus Hava and TAV Havalimanlari go up and down completely randomly.

Pair Corralation between Pegasus Hava and TAV Havalimanlari

Assuming the 90 days trading horizon Pegasus Hava Tasimaciligi is expected to generate 1.13 times more return on investment than TAV Havalimanlari. However, Pegasus Hava is 1.13 times more volatile than TAV Havalimanlari Holding. It trades about 0.12 of its potential returns per unit of risk. TAV Havalimanlari Holding is currently generating about -0.07 per unit of risk. If you would invest  21,420  in Pegasus Hava Tasimaciligi on December 30, 2024 and sell it today you would earn a total of  4,355  from holding Pegasus Hava Tasimaciligi or generate 20.33% return on investment over 90 days.

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

Pegasus Hava Tasimaciligi  vs.  TAV Havalimanlari Holding

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 demonstrated solid returns over the last few months and may actually be approaching a breakup point.

TAV Havalimanlari Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days TAV Havalimanlari Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Pegasus Hava and TAV Havalimanlari

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

The idea behind Pegasus Hava Tasimaciligi and TAV Havalimanlari Holding 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.