Correlation Between Turk Tuborg and Vestel Elektronik

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

By analyzing existing cross correlation between Turk Tuborg Bira and Vestel Elektronik Sanayi, you can compare the effects of market volatilities on Turk Tuborg and Vestel Elektronik 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 Tuborg with a short position of Vestel Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turk Tuborg and Vestel Elektronik.

Diversification Opportunities for Turk Tuborg and Vestel Elektronik

0.79

Correlation Coefficient

Turk Tuborg  Vestel Elektronik

Poor diversification

The 3 months correlation between Turk and Vestel is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Turk Tuborg Bira and Vestel Elektronik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestel Elektronik Sanayi and Turk Tuborg 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 Tuborg Bira are associated (or correlated) with Vestel Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestel Elektronik Sanayi has no effect on the direction of Turk Tuborg i.e., Turk Tuborg and Vestel Elektronik go up and down completely randomly.

Pair Corralation between Turk Tuborg and Vestel Elektronik

Assuming the 90 days trading horizon Turk Tuborg Bira is expected to under-perform the Vestel Elektronik. In addition to that, Turk Tuborg is 1.63 times more volatile than Vestel Elektronik Sanayi. It trades about 0.0 of its total potential returns per unit of risk. Vestel Elektronik Sanayi is currently generating about 0.06 per unit of volatility. If you would invest  7,000  in Vestel Elektronik Sanayi on October 6, 2024 and sell it today you would earn a total of  140.00  from holding Vestel Elektronik Sanayi or generate 2.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Turk Tuborg Bira  vs.  Vestel Elektronik Sanayi

Turk Tuborg Bira

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turk Tuborg Bira are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turk Tuborg may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vestel Elektronik Sanayi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vestel Elektronik Sanayi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Vestel Elektronik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turk Tuborg and Vestel Elektronik

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

The idea behind Turk Tuborg Bira and Vestel Elektronik Sanayi 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.