Correlation Between Turkish Airlines and Oyak Cimento

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

By analyzing existing cross correlation between Turkish Airlines and Oyak Cimento Fabrikalari, you can compare the effects of market volatilities on Turkish Airlines and Oyak Cimento 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 Oyak Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkish Airlines and Oyak Cimento.

Diversification Opportunities for Turkish Airlines and Oyak Cimento

0.68

Correlation Coefficient

Turkish Airlines  Oyak Cimento

Poor diversification

The 3 months correlation between Turkish and Oyak is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Turkish Airlines and Oyak Cimento Fabrikalari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oyak Cimento Fabrikalari 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 Oyak Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oyak Cimento Fabrikalari has no effect on the direction of Turkish Airlines i.e., Turkish Airlines and Oyak Cimento go up and down completely randomly.

Pair Corralation between Turkish Airlines and Oyak Cimento

Assuming the 90 days trading horizon Turkish Airlines is expected to generate 3.69 times less return on investment than Oyak Cimento. But when comparing it to its historical volatility, Turkish Airlines is 1.44 times less risky than Oyak Cimento. It trades about 0.09 of its potential returns per unit of risk. Oyak Cimento Fabrikalari is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,601  in Oyak Cimento Fabrikalari on October 8, 2024 and sell it today you would earn a total of  685.00  from holding Oyak Cimento Fabrikalari or generate 42.79% 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.  Oyak Cimento Fabrikalari

Turkish Airlines

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turkish Airlines are ranked lower than 7 (%) 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 February 2025.

Oyak Cimento Fabrikalari

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oyak Cimento Fabrikalari are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Oyak Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkish Airlines and Oyak Cimento

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

The idea behind Turkish Airlines and Oyak Cimento Fabrikalari 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.