Correlation Between VEON and Turkcell Iletisim

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

By analyzing existing cross correlation between VEON and Turkcell Iletisim Hizmetleri, you can compare the effects of market volatilities on VEON and Turkcell Iletisim 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 VEON with a short position of Turkcell Iletisim. Check out your portfolio center. Please also check ongoing floating volatility patterns of VEON and Turkcell Iletisim.

Diversification Opportunities for VEON and Turkcell Iletisim

-0.21

Correlation Coefficient

VEON  Turkcell Iletisim

Very good diversification

The 3 months correlation between VEON and Turkcell is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding VEON and Turkcell Iletisim Hizmetleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkcell Iletisim and VEON 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 VEON are associated (or correlated) with Turkcell Iletisim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkcell Iletisim has no effect on the direction of VEON i.e., VEON and Turkcell Iletisim go up and down completely randomly.

Pair Corralation between VEON and Turkcell Iletisim

Given the investment horizon of 90 days VEON is expected to generate 0.95 times more return on investment than Turkcell Iletisim. However, VEON is 1.05 times less risky than Turkcell Iletisim. It trades about 0.08 of its potential returns per unit of risk. Turkcell Iletisim Hizmetleri is currently generating about -0.02 per unit of risk. If you would invest  4,019  in VEON on December 28, 2024 and sell it today you would earn a total of  480.00  from holding VEON or generate 11.94% return on investment over 90 days.

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

VEON  vs.  Turkcell Iletisim Hizmetleri

VEON

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VEON are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, VEON displayed solid returns over the last few months and may actually be approaching a breakup point.

Turkcell Iletisim

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkcell Iletisim Hizmetleri has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Turkcell Iletisim is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VEON and Turkcell Iletisim

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

The idea behind VEON and Turkcell Iletisim Hizmetleri 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 CEOs Directory module to screen CEOs from public companies around the world.