Correlation Between Telecom Italia and Turkcell Iletisim

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

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

Diversification Opportunities for Telecom Italia and Turkcell Iletisim

0.0

Correlation Coefficient

Telecom Italia  Turkcell Iletisim

Pay attention - limited upside

The 3 months correlation between Telecom and Turkcell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and Turkcell Iletisim Hizmetleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkcell Iletisim and Telecom Italia 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 Telecom Italia SpA are associated (or correlated) with Turkcell Iletisim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkcell Iletisim has no effect on the direction of Telecom Italia i.e., Telecom Italia and Turkcell Iletisim go up and down completely randomly.

Pair Corralation between Telecom Italia and Turkcell Iletisim

If you would invest  605.00  in Turkcell Iletisim Hizmetleri on October 25, 2024 and sell it today you would earn a total of  137.00  from holding Turkcell Iletisim Hizmetleri or generate 22.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Telecom Italia SpA  vs.  Turkcell Iletisim Hizmetleri

Telecom Italia SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telecom Italia SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, Telecom Italia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Turkcell Iletisim

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turkcell Iletisim Hizmetleri are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal forward-looking signals, Turkcell Iletisim exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telecom Italia and Turkcell Iletisim

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

The idea behind Telecom Italia SpA and Turkcell Iletisim Hizmetleri 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .