Correlation Between Vestel Elektronik and Tofas Turk
Can any of the company-specific risk be diversified away by investing in both Vestel Elektronik and Tofas Turk 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 Vestel Elektronik and Tofas Turk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestel Elektronik Sanayi and Tofas Turk Otomobil, you can compare the effects of market volatilities on Vestel Elektronik and Tofas Turk 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 Vestel Elektronik with a short position of Tofas Turk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestel Elektronik and Tofas Turk.
Diversification Opportunities for Vestel Elektronik and Tofas Turk
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vestel and Tofas is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vestel Elektronik Sanayi and Tofas Turk Otomobil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tofas Turk Otomobil and Vestel Elektronik 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 Vestel Elektronik Sanayi are associated (or correlated) with Tofas Turk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tofas Turk Otomobil has no effect on the direction of Vestel Elektronik i.e., Vestel Elektronik and Tofas Turk go up and down completely randomly.
Pair Corralation between Vestel Elektronik and Tofas Turk
Assuming the 90 days trading horizon Vestel Elektronik Sanayi is expected to under-perform the Tofas Turk. But the stock apears to be less risky and, when comparing its historical volatility, Vestel Elektronik Sanayi is 1.0 times less risky than Tofas Turk. The stock trades about -0.19 of its potential returns per unit of risk. The Tofas Turk Otomobil is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 20,090 in Tofas Turk Otomobil on December 30, 2024 and sell it today you would lose (2,160) from holding Tofas Turk Otomobil or give up 10.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Vestel Elektronik Sanayi vs. Tofas Turk Otomobil
Performance |
Timeline |
Vestel Elektronik Sanayi |
Tofas Turk Otomobil |
Vestel Elektronik and Tofas Turk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vestel Elektronik and Tofas Turk
The main advantage of trading using opposite Vestel Elektronik and Tofas Turk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestel Elektronik position performs unexpectedly, Tofas Turk 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 Tofas Turk will offset losses from the drop in Tofas Turk's long position.Vestel Elektronik vs. Arcelik AS | Vestel Elektronik vs. Vestel Beyaz Esya | Vestel Elektronik vs. Eregli Demir ve | Vestel Elektronik vs. Turkiye Sise ve |
Tofas Turk vs. Ford Otomotiv Sanayi | Tofas Turk vs. Eregli Demir ve | Tofas Turk vs. Turkiye Petrol Rafinerileri | Tofas Turk vs. Turkiye Sise ve |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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