Correlation Between Yapi Ve and Turkish Airlines

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

By analyzing existing cross correlation between Yapi ve Kredi and Turkish Airlines, you can compare the effects of market volatilities on Yapi Ve and Turkish Airlines 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 Yapi Ve with a short position of Turkish Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yapi Ve and Turkish Airlines.

Diversification Opportunities for Yapi Ve and Turkish Airlines

0.75

Correlation Coefficient

Yapi Ve  Turkish Airlines

Poor diversification

The 3 months correlation between Yapi and Turkish is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Yapi ve Kredi and Turkish Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkish Airlines and Yapi Ve 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 Yapi ve Kredi are associated (or correlated) with Turkish Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkish Airlines has no effect on the direction of Yapi Ve i.e., Yapi Ve and Turkish Airlines go up and down completely randomly.

Pair Corralation between Yapi Ve and Turkish Airlines

Assuming the 90 days trading horizon Yapi ve Kredi is expected to generate 1.6 times more return on investment than Turkish Airlines. However, Yapi Ve is 1.6 times more volatile than Turkish Airlines. It trades about 0.05 of its potential returns per unit of risk. Turkish Airlines is currently generating about 0.05 per unit of risk. If you would invest  2,952  in Yapi ve Kredi on September 12, 2024 and sell it today you would earn a total of  172.00  from holding Yapi ve Kredi or generate 5.83% return on investment over 90 days.

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

Yapi ve Kredi  vs.  Turkish Airlines

Yapi ve Kredi

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yapi ve Kredi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Yapi Ve may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Turkish Airlines

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turkish Airlines are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turkish Airlines is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Yapi Ve and Turkish Airlines

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

The idea behind Yapi ve Kredi and Turkish Airlines 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.