Correlation Between Tofas Turk and Yatas Yatak

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

Diversification Opportunities for Tofas Turk and Yatas Yatak

0.61

Correlation Coefficient

Tofas Turk  Yatas Yatak

Poor diversification

The 3 months correlation between Tofas and Yatas is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil and Yatas Yatak ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatas Yatak 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 Yatas Yatak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatas Yatak ve has no effect on the direction of Tofas Turk i.e., Tofas Turk and Yatas Yatak go up and down completely randomly.

Pair Corralation between Tofas Turk and Yatas Yatak

Assuming the 90 days trading horizon Tofas Turk Otomobil is expected to under-perform the Yatas Yatak. But the stock apears to be less risky and, when comparing its historical volatility, Tofas Turk Otomobil is 1.0 times less risky than Yatas Yatak. The stock trades about -0.05 of its potential returns per unit of risk. The Yatas Yatak ve is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,776  in Yatas Yatak ve on December 30, 2024 and sell it today you would lose (132.00) from holding Yatas Yatak ve or give up 4.76% of portfolio value over 90 days.

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

Tofas Turk Otomobil  vs.  Yatas Yatak 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.

Yatas Yatak ve

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Tofas Turk and Yatas Yatak

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

The idea behind Tofas Turk Otomobil and Yatas Yatak 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.