Correlation Between Turkish Airlines and Ipek Dogal

Can any of the company-specific risk be diversified away by investing in both Turkish Airlines and Ipek Dogal 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 Turkish Airlines and Ipek Dogal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turkish Airlines and Ipek Dogal Enerji, you can compare the effects of market volatilities on Turkish Airlines and Ipek Dogal 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 Turkish Airlines with a short position of Ipek Dogal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkish Airlines and Ipek Dogal.

Diversification Opportunities for Turkish Airlines and Ipek Dogal

0.79

Correlation Coefficient

Turkish Airlines  Ipek Dogal

Poor diversification

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

Pair Corralation between Turkish Airlines and Ipek Dogal

Assuming the 90 days trading horizon Turkish Airlines is expected to generate 2.28 times less return on investment than Ipek Dogal. But when comparing it to its historical volatility, Turkish Airlines is 1.39 times less risky than Ipek Dogal. It trades about 0.08 of its potential returns per unit of risk. Ipek Dogal Enerji is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  5,050  in Ipek Dogal Enerji on December 28, 2024 and sell it today you would earn a total of  1,280  from holding Ipek Dogal Enerji or generate 25.35% return on investment over 90 days.

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

Turkish Airlines  vs.  Ipek Dogal Enerji

Turkish Airlines

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turkish Airlines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkish Airlines may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ipek Dogal Enerji

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ipek Dogal Enerji are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Ipek Dogal demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkish Airlines and Ipek Dogal

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

The idea behind Turkish Airlines and Ipek Dogal Enerji 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 CEOs Directory module to screen CEOs from public companies around the world.