Correlation Between Turkiye Kalkinma and Europap Tezol

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

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

Diversification Opportunities for Turkiye Kalkinma and Europap Tezol

0.55

Correlation Coefficient

Turkiye Kalkinma  Europap Tezol

Very weak diversification

The 3 months correlation between Turkiye and Europap is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Kalkinma Bankasi and Europap Tezol Kagit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europap Tezol Kagit and Turkiye Kalkinma 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 Kalkinma Bankasi are associated (or correlated) with Europap Tezol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europap Tezol Kagit has no effect on the direction of Turkiye Kalkinma i.e., Turkiye Kalkinma and Europap Tezol go up and down completely randomly.

Pair Corralation between Turkiye Kalkinma and Europap Tezol

Assuming the 90 days trading horizon Turkiye Kalkinma Bankasi is expected to generate 0.72 times more return on investment than Europap Tezol. However, Turkiye Kalkinma Bankasi is 1.38 times less risky than Europap Tezol. It trades about -0.07 of its potential returns per unit of risk. Europap Tezol Kagit is currently generating about -0.1 per unit of risk. If you would invest  1,509  in Turkiye Kalkinma Bankasi on September 26, 2024 and sell it today you would lose (132.00) from holding Turkiye Kalkinma Bankasi or give up 8.75% of portfolio value over 90 days.

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

Turkiye Kalkinma Bankasi  vs.  Europap Tezol Kagit

Turkiye Kalkinma Bankasi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turkiye Kalkinma Bankasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Europap Tezol Kagit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Europap Tezol Kagit 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.

Pair Trading with Turkiye Kalkinma and Europap Tezol

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

The idea behind Turkiye Kalkinma Bankasi and Europap Tezol Kagit 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.