Correlation Between Tekfen Holding and Vestel Beyaz

Can any of the company-specific risk be diversified away by investing in both Tekfen Holding and Vestel Beyaz 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 Vestel Beyaz 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 Vestel Beyaz Esya, you can compare the effects of market volatilities on Tekfen Holding and Vestel Beyaz 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 Vestel Beyaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekfen Holding and Vestel Beyaz.

Diversification Opportunities for Tekfen Holding and Vestel Beyaz

-0.06

Correlation Coefficient

Tekfen Holding  Vestel Beyaz

Good diversification

The 3 months correlation between Tekfen and Vestel is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tekfen Holding AS and Vestel Beyaz Esya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestel Beyaz Esya 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 Vestel Beyaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestel Beyaz Esya has no effect on the direction of Tekfen Holding i.e., Tekfen Holding and Vestel Beyaz go up and down completely randomly.

Pair Corralation between Tekfen Holding and Vestel Beyaz

Assuming the 90 days trading horizon Tekfen Holding AS is expected to generate 1.73 times more return on investment than Vestel Beyaz. However, Tekfen Holding is 1.73 times more volatile than Vestel Beyaz Esya. It trades about 0.18 of its potential returns per unit of risk. Vestel Beyaz Esya is currently generating about 0.03 per unit of risk. If you would invest  5,490  in Tekfen Holding AS on September 17, 2024 and sell it today you would earn a total of  2,130  from holding Tekfen Holding AS or generate 38.8% return on investment over 90 days.

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

Tekfen Holding AS  vs.  Vestel Beyaz Esya

Tekfen Holding AS

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tekfen Holding AS are ranked lower than 14 (%) 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.

Vestel Beyaz Esya

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vestel Beyaz Esya are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Vestel Beyaz is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Tekfen Holding and Vestel Beyaz

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

The idea behind Tekfen Holding AS and Vestel Beyaz Esya 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.