Correlation Between Turkish Airlines and Turk Traktor

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

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

Diversification Opportunities for Turkish Airlines and Turk Traktor

0.64

Correlation Coefficient

Turkish Airlines  Turk Traktor

Poor diversification

The 3 months correlation between Turkish and Turk is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Turkish Airlines and Turk Traktor ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turk Traktor ve and Turkish Airlines 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 Turkish Airlines are associated (or correlated) with Turk Traktor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turk Traktor ve has no effect on the direction of Turkish Airlines i.e., Turkish Airlines and Turk Traktor go up and down completely randomly.

Pair Corralation between Turkish Airlines and Turk Traktor

Assuming the 90 days trading horizon Turkish Airlines is expected to under-perform the Turk Traktor. In addition to that, Turkish Airlines is 1.03 times more volatile than Turk Traktor ve. It trades about -0.01 of its total potential returns per unit of risk. Turk Traktor ve is currently generating about 0.02 per unit of volatility. If you would invest  69,813  in Turk Traktor ve on September 21, 2024 and sell it today you would earn a total of  1,237  from holding Turk Traktor ve or generate 1.77% return on investment over 90 days.

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

Turkish Airlines  vs.  Turk Traktor ve

Turkish Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turkish Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Turk Traktor ve

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turk Traktor ve are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turk Traktor is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Turkish Airlines and Turk Traktor

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

The idea behind Turkish Airlines and Turk Traktor ve 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.