Correlation Between Turkcell Iletisim and Telefonica Brasil

Can any of the company-specific risk be diversified away by investing in both Turkcell Iletisim and Telefonica Brasil 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 Telefonica Brasil 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 Telefonica Brasil SA, you can compare the effects of market volatilities on Turkcell Iletisim and Telefonica Brasil 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 Telefonica Brasil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkcell Iletisim and Telefonica Brasil.

Diversification Opportunities for Turkcell Iletisim and Telefonica Brasil

0.12

Correlation Coefficient

Turkcell Iletisim  Telefonica Brasil

Average diversification

The 3 months correlation between Turkcell and Telefonica is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Turkcell Iletisim Hizmetleri and Telefonica Brasil SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonica Brasil 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 Telefonica Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonica Brasil has no effect on the direction of Turkcell Iletisim i.e., Turkcell Iletisim and Telefonica Brasil go up and down completely randomly.

Pair Corralation between Turkcell Iletisim and Telefonica Brasil

Considering the 90-day investment horizon Turkcell Iletisim Hizmetleri is expected to generate 0.96 times more return on investment than Telefonica Brasil. However, Turkcell Iletisim Hizmetleri is 1.05 times less risky than Telefonica Brasil. It trades about 0.04 of its potential returns per unit of risk. Telefonica Brasil SA is currently generating about -0.18 per unit of risk. If you would invest  653.00  in Turkcell Iletisim Hizmetleri on September 14, 2024 and sell it today you would earn a total of  20.50  from holding Turkcell Iletisim Hizmetleri or generate 3.14% return on investment over 90 days.

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

Turkcell Iletisim Hizmetleri  vs.  Telefonica Brasil SA

Turkcell Iletisim

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkcell Iletisim Hizmetleri are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Turkcell Iletisim is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Telefonica Brasil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telefonica Brasil SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Turkcell Iletisim and Telefonica Brasil

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

The idea behind Turkcell Iletisim Hizmetleri and Telefonica Brasil SA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.