Correlation Between Tekfen Holding and Turkiye Sinai

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

By analyzing existing cross correlation between Tekfen Holding AS and Turkiye Sinai Kalkinma, you can compare the effects of market volatilities on Tekfen Holding and Turkiye Sinai 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 Tekfen Holding with a short position of Turkiye Sinai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekfen Holding and Turkiye Sinai.

Diversification Opportunities for Tekfen Holding and Turkiye Sinai

0.74

Correlation Coefficient

Tekfen Holding  Turkiye Sinai

Poor diversification

The 3 months correlation between Tekfen and Turkiye is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tekfen Holding AS and Turkiye Sinai Kalkinma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Sinai Kalkinma and Tekfen Holding 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 Tekfen Holding AS are associated (or correlated) with Turkiye Sinai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Sinai Kalkinma has no effect on the direction of Tekfen Holding i.e., Tekfen Holding and Turkiye Sinai go up and down completely randomly.

Pair Corralation between Tekfen Holding and Turkiye Sinai

Assuming the 90 days trading horizon Tekfen Holding AS is expected to under-perform the Turkiye Sinai. In addition to that, Tekfen Holding is 1.48 times more volatile than Turkiye Sinai Kalkinma. It trades about -0.18 of its total potential returns per unit of risk. Turkiye Sinai Kalkinma is currently generating about -0.07 per unit of volatility. If you would invest  1,248  in Turkiye Sinai Kalkinma on September 22, 2024 and sell it today you would lose (33.00) from holding Turkiye Sinai Kalkinma or give up 2.64% of portfolio value over 90 days.

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

Tekfen Holding AS  vs.  Turkiye Sinai Kalkinma

Tekfen Holding AS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tekfen Holding AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Tekfen Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Turkiye Sinai Kalkinma

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Sinai Kalkinma are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Turkiye Sinai is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tekfen Holding and Turkiye Sinai

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

The idea behind Tekfen Holding AS and Turkiye Sinai Kalkinma 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.