Correlation Between Turkish Airlines and Turkiye Vakiflar

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

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

Diversification Opportunities for Turkish Airlines and Turkiye Vakiflar

0.46

Correlation Coefficient

Turkish Airlines  Turkiye Vakiflar

Very weak diversification

The 3 months correlation between Turkish and Turkiye is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Turkish Airlines and Turkiye Vakiflar Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Vakiflar Bankasi 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 Turkiye Vakiflar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Vakiflar Bankasi has no effect on the direction of Turkish Airlines i.e., Turkish Airlines and Turkiye Vakiflar go up and down completely randomly.

Pair Corralation between Turkish Airlines and Turkiye Vakiflar

Assuming the 90 days trading horizon Turkish Airlines is expected to generate 1.21 times less return on investment than Turkiye Vakiflar. But when comparing it to its historical volatility, Turkish Airlines is 1.12 times less risky than Turkiye Vakiflar. It trades about 0.07 of its potential returns per unit of risk. Turkiye Vakiflar Bankasi is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  967.00  in Turkiye Vakiflar Bankasi on October 4, 2024 and sell it today you would earn a total of  1,439  from holding Turkiye Vakiflar Bankasi or generate 148.81% return on investment over 90 days.

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

Turkish Airlines  vs.  Turkiye Vakiflar Bankasi

Turkish Airlines

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turkish Airlines are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turkish Airlines is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Turkiye Vakiflar Bankasi

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Turkish Airlines and Turkiye Vakiflar

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

The idea behind Turkish Airlines and Turkiye Vakiflar Bankasi 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.