Correlation Between Yesil Yapi and Netas Telekomunikasyon

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

By analyzing existing cross correlation between Yesil Yapi Endustrisi and Netas Telekomunikasyon AS, you can compare the effects of market volatilities on Yesil Yapi and Netas Telekomunikasyon 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 Yesil Yapi with a short position of Netas Telekomunikasyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yesil Yapi and Netas Telekomunikasyon.

Diversification Opportunities for Yesil Yapi and Netas Telekomunikasyon

0.56

Correlation Coefficient

Yesil Yapi  Netas Telekomunikasyon

Very weak diversification

The 3 months correlation between Yesil and Netas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Yesil Yapi Endustrisi and Netas Telekomunikasyon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netas Telekomunikasyon and Yesil Yapi 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 Yesil Yapi Endustrisi are associated (or correlated) with Netas Telekomunikasyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netas Telekomunikasyon has no effect on the direction of Yesil Yapi i.e., Yesil Yapi and Netas Telekomunikasyon go up and down completely randomly.

Pair Corralation between Yesil Yapi and Netas Telekomunikasyon

Assuming the 90 days trading horizon Yesil Yapi Endustrisi is expected to under-perform the Netas Telekomunikasyon. In addition to that, Yesil Yapi is 1.4 times more volatile than Netas Telekomunikasyon AS. It trades about -0.22 of its total potential returns per unit of risk. Netas Telekomunikasyon AS is currently generating about -0.14 per unit of volatility. If you would invest  6,535  in Netas Telekomunikasyon AS on December 24, 2024 and sell it today you would lose (1,475) from holding Netas Telekomunikasyon AS or give up 22.57% of portfolio value over 90 days.

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

Yesil Yapi Endustrisi  vs.  Netas Telekomunikasyon AS

Yesil Yapi Endustrisi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yesil Yapi Endustrisi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Netas Telekomunikasyon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Netas Telekomunikasyon AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Yesil Yapi and Netas Telekomunikasyon

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

The idea behind Yesil Yapi Endustrisi and Netas Telekomunikasyon 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.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.