Correlation Between Turk Telekomunikasyon and America Movil

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

By analyzing existing cross correlation between Turk Telekomunikasyon AS and America Movil SAB, you can compare the effects of market volatilities on Turk Telekomunikasyon and America Movil 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 Turk Telekomunikasyon with a short position of America Movil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turk Telekomunikasyon and America Movil.

Diversification Opportunities for Turk Telekomunikasyon and America Movil

0.71

Correlation Coefficient

Turk Telekomunikasyon  America Movil

Poor diversification

The 3 months correlation between Turk and America is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Turk Telekomunikasyon AS and America Movil SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on America Movil SAB and Turk Telekomunikasyon 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 Turk Telekomunikasyon AS are associated (or correlated) with America Movil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of America Movil SAB has no effect on the direction of Turk Telekomunikasyon i.e., Turk Telekomunikasyon and America Movil go up and down completely randomly.

Pair Corralation between Turk Telekomunikasyon and America Movil

Assuming the 90 days horizon Turk Telekomunikasyon AS is expected to under-perform the America Movil. But the pink sheet apears to be less risky and, when comparing its historical volatility, Turk Telekomunikasyon AS is 1.77 times less risky than America Movil. The pink sheet trades about -0.33 of its potential returns per unit of risk. The America Movil SAB is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  1,500  in America Movil SAB on October 9, 2024 and sell it today you would lose (83.00) from holding America Movil SAB or give up 5.53% of portfolio value over 90 days.

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

Turk Telekomunikasyon AS  vs.  America Movil SAB

Turk Telekomunikasyon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turk Telekomunikasyon AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

America Movil SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days America Movil SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Turk Telekomunikasyon and America Movil

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

The idea behind Turk Telekomunikasyon AS and America Movil SAB 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.