Correlation Between BIM Birlesik and Tekfen Holding

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

By analyzing existing cross correlation between BIM Birlesik Magazalar and Tekfen Holding AS, you can compare the effects of market volatilities on BIM Birlesik and Tekfen Holding 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 BIM Birlesik with a short position of Tekfen Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIM Birlesik and Tekfen Holding.

Diversification Opportunities for BIM Birlesik and Tekfen Holding

-0.2

Correlation Coefficient

BIM Birlesik  Tekfen Holding

Good diversification

The 3 months correlation between BIM and Tekfen is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding BIM Birlesik Magazalar and Tekfen Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekfen Holding AS and BIM Birlesik 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 BIM Birlesik Magazalar are associated (or correlated) with Tekfen Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekfen Holding AS has no effect on the direction of BIM Birlesik i.e., BIM Birlesik and Tekfen Holding go up and down completely randomly.

Pair Corralation between BIM Birlesik and Tekfen Holding

Assuming the 90 days trading horizon BIM Birlesik Magazalar is expected to under-perform the Tekfen Holding. But the stock apears to be less risky and, when comparing its historical volatility, BIM Birlesik Magazalar is 1.21 times less risky than Tekfen Holding. The stock trades about -0.08 of its potential returns per unit of risk. The Tekfen Holding AS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5,740  in Tekfen Holding AS on September 22, 2024 and sell it today you would earn a total of  1,645  from holding Tekfen Holding AS or generate 28.66% return on investment over 90 days.

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

BIM Birlesik Magazalar  vs.  Tekfen Holding AS

BIM Birlesik Magazalar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BIM Birlesik Magazalar 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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Tekfen Holding AS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tekfen Holding AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Tekfen Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BIM Birlesik and Tekfen Holding

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

The idea behind BIM Birlesik Magazalar and Tekfen Holding 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.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.