Correlation Between Turk Traktor and Dogus Otomotiv

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

By analyzing existing cross correlation between Turk Traktor ve and Dogus Otomotiv Servis, you can compare the effects of market volatilities on Turk Traktor and Dogus Otomotiv 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 Traktor with a short position of Dogus Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turk Traktor and Dogus Otomotiv.

Diversification Opportunities for Turk Traktor and Dogus Otomotiv

0.94

Correlation Coefficient

Turk Traktor  Dogus Otomotiv

Almost no diversification

The 3 months correlation between Turk and Dogus is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Turk Traktor ve and Dogus Otomotiv Servis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dogus Otomotiv Servis and Turk Traktor 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 Traktor ve are associated (or correlated) with Dogus Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dogus Otomotiv Servis has no effect on the direction of Turk Traktor i.e., Turk Traktor and Dogus Otomotiv go up and down completely randomly.

Pair Corralation between Turk Traktor and Dogus Otomotiv

Assuming the 90 days trading horizon Turk Traktor ve is expected to generate 0.68 times more return on investment than Dogus Otomotiv. However, Turk Traktor ve is 1.48 times less risky than Dogus Otomotiv. It trades about 0.11 of its potential returns per unit of risk. Dogus Otomotiv Servis is currently generating about 0.07 per unit of risk. If you would invest  72,200  in Turk Traktor ve on December 27, 2024 and sell it today you would earn a total of  9,850  from holding Turk Traktor ve or generate 13.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Turk Traktor ve  vs.  Dogus Otomotiv Servis

Turk Traktor ve

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turk Traktor ve are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turk Traktor demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Dogus Otomotiv Servis

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dogus Otomotiv Servis are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Dogus Otomotiv unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turk Traktor and Dogus Otomotiv

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

The idea behind Turk Traktor ve and Dogus Otomotiv Servis 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.