Correlation Between Tofas Turk and Turkiye Sise

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

Diversification Opportunities for Tofas Turk and Turkiye Sise

0.33

Correlation Coefficient

Tofas Turk  Turkiye Sise

Weak diversification

The 3 months correlation between Tofas and Turkiye is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil and Turkiye Sise ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Sise ve 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 Turkiye Sise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Sise ve has no effect on the direction of Tofas Turk i.e., Tofas Turk and Turkiye Sise go up and down completely randomly.

Pair Corralation between Tofas Turk and Turkiye Sise

Assuming the 90 days trading horizon Tofas Turk Otomobil is expected to under-perform the Turkiye Sise. In addition to that, Tofas Turk is 1.15 times more volatile than Turkiye Sise ve. It trades about -0.05 of its total potential returns per unit of risk. Turkiye Sise ve is currently generating about -0.06 per unit of volatility. If you would invest  4,280  in Turkiye Sise ve on December 30, 2024 and sell it today you would lose (422.00) from holding Turkiye Sise ve or give up 9.86% of portfolio value over 90 days.

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

Tofas Turk Otomobil  vs.  Turkiye Sise ve

Tofas Turk Otomobil

Risk-Adjusted Performance

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 latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Turkiye Sise ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkiye Sise ve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Tofas Turk and Turkiye Sise

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

The idea behind Tofas Turk Otomobil and Turkiye Sise ve 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 Anywhere module to track or share privately all of your investments from the convenience of any device.