Correlation Between Tofas Turk and Ingram Micro

Can any of the company-specific risk be diversified away by investing in both Tofas Turk and Ingram Micro 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 Ingram Micro 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 Ingram Micro Bilisim, you can compare the effects of market volatilities on Tofas Turk and Ingram Micro 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 Ingram Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tofas Turk and Ingram Micro.

Diversification Opportunities for Tofas Turk and Ingram Micro

0.4

Correlation Coefficient

Tofas Turk  Ingram Micro

Very weak diversification

The 3 months correlation between Tofas and Ingram is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil and Ingram Micro Bilisim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingram Micro Bilisim 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 Ingram Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingram Micro Bilisim has no effect on the direction of Tofas Turk i.e., Tofas Turk and Ingram Micro go up and down completely randomly.

Pair Corralation between Tofas Turk and Ingram Micro

Assuming the 90 days trading horizon Tofas Turk Otomobil is expected to generate 1.03 times more return on investment than Ingram Micro. However, Tofas Turk is 1.03 times more volatile than Ingram Micro Bilisim. It trades about 0.06 of its potential returns per unit of risk. Ingram Micro Bilisim is currently generating about 0.02 per unit of risk. If you would invest  19,600  in Tofas Turk Otomobil on October 5, 2024 and sell it today you would earn a total of  1,620  from holding Tofas Turk Otomobil or generate 8.27% return on investment over 90 days.

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

Tofas Turk Otomobil  vs.  Ingram Micro Bilisim

Tofas Turk Otomobil

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tofas Turk Otomobil are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Tofas Turk may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ingram Micro Bilisim

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ingram Micro Bilisim are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Ingram Micro 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 Ingram Micro

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

The idea behind Tofas Turk Otomobil and Ingram Micro Bilisim 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.