Correlation Between Turkiye Sise and Arcelik AS

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

By analyzing existing cross correlation between Turkiye Sise ve and Arcelik AS, you can compare the effects of market volatilities on Turkiye Sise and Arcelik AS 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 Turkiye Sise with a short position of Arcelik AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Sise and Arcelik AS.

Diversification Opportunities for Turkiye Sise and Arcelik AS

0.88

Correlation Coefficient

Turkiye Sise  Arcelik AS

Very poor diversification

The 3 months correlation between Turkiye and Arcelik is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Sise ve and Arcelik AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcelik AS and Turkiye Sise 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 Turkiye Sise ve are associated (or correlated) with Arcelik AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcelik AS has no effect on the direction of Turkiye Sise i.e., Turkiye Sise and Arcelik AS go up and down completely randomly.

Pair Corralation between Turkiye Sise and Arcelik AS

Assuming the 90 days trading horizon Turkiye Sise ve is expected to under-perform the Arcelik AS. But the stock apears to be less risky and, when comparing its historical volatility, Turkiye Sise ve is 1.06 times less risky than Arcelik AS. The stock trades about -0.14 of its potential returns per unit of risk. The Arcelik AS is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  14,300  in Arcelik AS on December 2, 2024 and sell it today you would lose (1,540) from holding Arcelik AS or give up 10.77% of portfolio value over 90 days.

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

Turkiye Sise ve  vs.  Arcelik AS

Turkiye Sise ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkiye Sise ve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Arcelik AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arcelik AS 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 Turkiye Sise and Arcelik AS

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

The idea behind Turkiye Sise ve and Arcelik 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.