Correlation Between Tofas Turk and Derimod Konfeksiyon

Can any of the company-specific risk be diversified away by investing in both Tofas Turk and Derimod Konfeksiyon 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 Tofas Turk and Derimod Konfeksiyon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tofas Turk Otomobil and Derimod Konfeksiyon Ayakkabi, you can compare the effects of market volatilities on Tofas Turk and Derimod Konfeksiyon 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 Tofas Turk with a short position of Derimod Konfeksiyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tofas Turk and Derimod Konfeksiyon.

Diversification Opportunities for Tofas Turk and Derimod Konfeksiyon

0.39

Correlation Coefficient

Tofas Turk  Derimod Konfeksiyon

Weak diversification

The 3 months correlation between Tofas and Derimod is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil and Derimod Konfeksiyon Ayakkabi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derimod Konfeksiyon and Tofas Turk 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 Tofas Turk Otomobil are associated (or correlated) with Derimod Konfeksiyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derimod Konfeksiyon has no effect on the direction of Tofas Turk i.e., Tofas Turk and Derimod Konfeksiyon go up and down completely randomly.

Pair Corralation between Tofas Turk and Derimod Konfeksiyon

Assuming the 90 days trading horizon Tofas Turk Otomobil is expected to under-perform the Derimod Konfeksiyon. But the stock apears to be less risky and, when comparing its historical volatility, Tofas Turk Otomobil is 1.79 times less risky than Derimod Konfeksiyon. The stock trades about -0.22 of its potential returns per unit of risk. The Derimod Konfeksiyon Ayakkabi is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,196  in Derimod Konfeksiyon Ayakkabi on September 23, 2024 and sell it today you would earn a total of  158.00  from holding Derimod Konfeksiyon Ayakkabi or generate 4.94% return on investment over 90 days.

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

Tofas Turk Otomobil  vs.  Derimod Konfeksiyon Ayakkabi

Tofas Turk Otomobil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tofas Turk Otomobil has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Derimod Konfeksiyon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Derimod Konfeksiyon Ayakkabi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Derimod Konfeksiyon is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Tofas Turk and Derimod Konfeksiyon

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

The idea behind Tofas Turk Otomobil and Derimod Konfeksiyon Ayakkabi 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 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.