Correlation Between Turkcell Iletisim and Eregli Demir

Can any of the company-specific risk be diversified away by investing in both Turkcell Iletisim and Eregli Demir 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 Turkcell Iletisim and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turkcell Iletisim Hizmetleri and Eregli Demir ve, you can compare the effects of market volatilities on Turkcell Iletisim and Eregli Demir 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 Turkcell Iletisim with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkcell Iletisim and Eregli Demir.

Diversification Opportunities for Turkcell Iletisim and Eregli Demir

-0.78

Correlation Coefficient

Turkcell Iletisim  Eregli Demir

Pay attention - limited upside

The 3 months correlation between Turkcell and Eregli is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Turkcell Iletisim Hizmetleri and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and Turkcell Iletisim 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 Turkcell Iletisim Hizmetleri are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Turkcell Iletisim i.e., Turkcell Iletisim and Eregli Demir go up and down completely randomly.

Pair Corralation between Turkcell Iletisim and Eregli Demir

Assuming the 90 days trading horizon Turkcell Iletisim Hizmetleri is expected to generate 1.05 times more return on investment than Eregli Demir. However, Turkcell Iletisim is 1.05 times more volatile than Eregli Demir ve. It trades about 0.1 of its potential returns per unit of risk. Eregli Demir ve is currently generating about -0.14 per unit of risk. If you would invest  9,105  in Turkcell Iletisim Hizmetleri on December 3, 2024 and sell it today you would earn a total of  965.00  from holding Turkcell Iletisim Hizmetleri or generate 10.6% return on investment over 90 days.

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

Turkcell Iletisim Hizmetleri  vs.  Eregli Demir ve

Turkcell Iletisim

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turkcell Iletisim Hizmetleri are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkcell Iletisim may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Eregli Demir ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eregli Demir ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Turkcell Iletisim and Eregli Demir

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

The idea behind Turkcell Iletisim Hizmetleri and Eregli Demir ve 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.