Correlation Between Turkiye Sise and Turk Telekomunikasyon

Can any of the company-specific risk be diversified away by investing in both Turkiye Sise 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 Turkiye Sise and Turk Telekomunikasyon 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 Turk Telekomunikasyon AS, you can compare the effects of market volatilities on Turkiye Sise 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 Turkiye Sise with a short position of Turk Telekomunikasyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Sise and Turk Telekomunikasyon.

Diversification Opportunities for Turkiye Sise and Turk Telekomunikasyon

-0.24

Correlation Coefficient

Turkiye Sise  Turk Telekomunikasyon

Very good diversification

The 3 months correlation between Turkiye and Turk is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Sise ve and Turk Telekomunikasyon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turk Telekomunikasyon 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 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 Turkiye Sise i.e., Turkiye Sise and Turk Telekomunikasyon go up and down completely randomly.

Pair Corralation between Turkiye Sise and Turk Telekomunikasyon

Assuming the 90 days trading horizon Turkiye Sise ve is expected to under-perform the Turk Telekomunikasyon. But the stock apears to be less risky and, when comparing its historical volatility, Turkiye Sise ve is 1.01 times less risky than Turk Telekomunikasyon. The stock trades about -0.07 of its potential returns per unit of risk. The Turk Telekomunikasyon AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,590  in Turk Telekomunikasyon AS on October 12, 2024 and sell it today you would earn a total of  56.00  from holding Turk Telekomunikasyon AS or generate 1.22% return on investment over 90 days.

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

Turkiye Sise ve  vs.  Turk Telekomunikasyon AS

Turkiye Sise ve

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Sise ve are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Turkiye Sise may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Turk Telekomunikasyon

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turk Telekomunikasyon AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turk Telekomunikasyon is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Turkiye Sise and Turk Telekomunikasyon

The main advantage of trading using opposite Turkiye Sise and Turk Telekomunikasyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Sise 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 Turkiye Sise ve 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.