Correlation Between Turkiye Is and DO AG

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

By analyzing existing cross correlation between Turkiye Is Bankasi and DO AG, you can compare the effects of market volatilities on Turkiye Is and DO AG 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 Turkiye Is with a short position of DO AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Is and DO AG.

Diversification Opportunities for Turkiye Is and DO AG

-0.34

Correlation Coefficient

Turkiye Is  DO AG

Very good diversification

The 3 months correlation between Turkiye and DOCO is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Is Bankasi and DO AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO AG and Turkiye Is 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 Turkiye Is Bankasi are associated (or correlated) with DO AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO AG has no effect on the direction of Turkiye Is i.e., Turkiye Is and DO AG go up and down completely randomly.

Pair Corralation between Turkiye Is and DO AG

Assuming the 90 days trading horizon Turkiye Is Bankasi is expected to under-perform the DO AG. In addition to that, Turkiye Is is 1.32 times more volatile than DO AG. It trades about -0.07 of its total potential returns per unit of risk. DO AG is currently generating about 0.13 per unit of volatility. If you would invest  533,500  in DO AG on September 22, 2024 and sell it today you would earn a total of  107,750  from holding DO AG or generate 20.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Turkiye Is Bankasi  vs.  DO AG

Turkiye Is Bankasi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turkiye Is Bankasi 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.

DO AG

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DO AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, DO AG unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Is and DO AG

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

The idea behind Turkiye Is Bankasi and DO AG 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.