Correlation Between Turk Telekomunikasyon and Creditwest Faktoring

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

Diversification Opportunities for Turk Telekomunikasyon and Creditwest Faktoring

0.03

Correlation Coefficient

Turk Telekomunikasyon  Creditwest Faktoring

Significant diversification

The 3 months correlation between Turk and Creditwest is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Turk Telekomunikasyon AS and Creditwest Faktoring AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creditwest Faktoring 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 Creditwest Faktoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creditwest Faktoring has no effect on the direction of Turk Telekomunikasyon i.e., Turk Telekomunikasyon and Creditwest Faktoring go up and down completely randomly.

Pair Corralation between Turk Telekomunikasyon and Creditwest Faktoring

Assuming the 90 days trading horizon Turk Telekomunikasyon AS is expected to under-perform the Creditwest Faktoring. But the stock apears to be less risky and, when comparing its historical volatility, Turk Telekomunikasyon AS is 2.49 times less risky than Creditwest Faktoring. The stock trades about -0.06 of its potential returns per unit of risk. The Creditwest Faktoring AS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  596.00  in Creditwest Faktoring AS on September 5, 2024 and sell it today you would earn a total of  89.00  from holding Creditwest Faktoring AS or generate 14.93% return on investment over 90 days.

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

Turk Telekomunikasyon AS  vs.  Creditwest Faktoring AS

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. 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.

Creditwest Faktoring

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Creditwest Faktoring AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Creditwest Faktoring demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turk Telekomunikasyon and Creditwest Faktoring

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

The idea behind Turk Telekomunikasyon AS and Creditwest Faktoring AS 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.