Correlation Between Turk Prysmian and Kafein Yazilim

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

By analyzing existing cross correlation between Turk Prysmian Kablo and Kafein Yazilim, you can compare the effects of market volatilities on Turk Prysmian and Kafein Yazilim 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 Turk Prysmian with a short position of Kafein Yazilim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turk Prysmian and Kafein Yazilim.

Diversification Opportunities for Turk Prysmian and Kafein Yazilim

0.13

Correlation Coefficient

Turk Prysmian  Kafein Yazilim

Average diversification

The 3 months correlation between Turk and Kafein is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Turk Prysmian Kablo and Kafein Yazilim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kafein Yazilim and Turk Prysmian 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 Turk Prysmian Kablo are associated (or correlated) with Kafein Yazilim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kafein Yazilim has no effect on the direction of Turk Prysmian i.e., Turk Prysmian and Kafein Yazilim go up and down completely randomly.

Pair Corralation between Turk Prysmian and Kafein Yazilim

Assuming the 90 days trading horizon Turk Prysmian is expected to generate 7.29 times less return on investment than Kafein Yazilim. But when comparing it to its historical volatility, Turk Prysmian Kablo is 1.87 times less risky than Kafein Yazilim. It trades about 0.12 of its potential returns per unit of risk. Kafein Yazilim is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest  8,630  in Kafein Yazilim on October 26, 2024 and sell it today you would earn a total of  2,240  from holding Kafein Yazilim or generate 25.96% return on investment over 90 days.

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

Turk Prysmian Kablo  vs.  Kafein Yazilim

Turk Prysmian Kablo

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kafein Yazilim

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kafein Yazilim are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kafein Yazilim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turk Prysmian and Kafein Yazilim

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

The idea behind Turk Prysmian Kablo and Kafein Yazilim 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.