Correlation Between Tofas Turk and Is Finansal

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

Diversification Opportunities for Tofas Turk and Is Finansal

0.25

Correlation Coefficient

Tofas Turk  Is Finansal

Modest diversification

The 3 months correlation between Tofas and ISFIN is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil and Is Finansal Kiralama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Is Finansal Kiralama 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 Is Finansal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Is Finansal Kiralama has no effect on the direction of Tofas Turk i.e., Tofas Turk and Is Finansal go up and down completely randomly.

Pair Corralation between Tofas Turk and Is Finansal

Assuming the 90 days trading horizon Tofas Turk Otomobil is expected to under-perform the Is Finansal. In addition to that, Tofas Turk is 1.12 times more volatile than Is Finansal Kiralama. It trades about -0.22 of its total potential returns per unit of risk. Is Finansal Kiralama is currently generating about 0.27 per unit of volatility. If you would invest  1,130  in Is Finansal Kiralama on September 23, 2024 and sell it today you would earn a total of  125.00  from holding Is Finansal Kiralama or generate 11.06% 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.  Is Finansal Kiralama

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.

Is Finansal Kiralama

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Is Finansal Kiralama are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Is Finansal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tofas Turk and Is Finansal

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

The idea behind Tofas Turk Otomobil and Is Finansal Kiralama 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.