Correlation Between Astra International and Turk Telekomunikasyon

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

By analyzing existing cross correlation between Astra International Tbk and Turk Telekomunikasyon AS, you can compare the effects of market volatilities on Astra International and Turk Telekomunikasyon 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 Astra International with a short position of Turk Telekomunikasyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Turk Telekomunikasyon.

Diversification Opportunities for Astra International and Turk Telekomunikasyon

-0.22

Correlation Coefficient

Astra International  Turk Telekomunikasyon

Very good diversification

The 3 months correlation between Astra and Turk is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Turk Telekomunikasyon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turk Telekomunikasyon and Astra International 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 Astra International Tbk are associated (or correlated) with Turk Telekomunikasyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turk Telekomunikasyon has no effect on the direction of Astra International i.e., Astra International and Turk Telekomunikasyon go up and down completely randomly.

Pair Corralation between Astra International and Turk Telekomunikasyon

Assuming the 90 days horizon Astra International Tbk is expected to under-perform the Turk Telekomunikasyon. But the pink sheet apears to be less risky and, when comparing its historical volatility, Astra International Tbk is 2.95 times less risky than Turk Telekomunikasyon. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Turk Telekomunikasyon AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  210.00  in Turk Telekomunikasyon AS on December 3, 2024 and sell it today you would earn a total of  47.00  from holding Turk Telekomunikasyon AS or generate 22.38% return on investment over 90 days.

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

Astra International Tbk  vs.  Turk Telekomunikasyon AS

Astra International Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Astra International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Turk Telekomunikasyon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turk Telekomunikasyon AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Turk Telekomunikasyon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astra International and Turk Telekomunikasyon

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

The idea behind Astra International Tbk and Turk Telekomunikasyon AS 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.