Correlation Between Tofas Turk and Ufuk Yatirim

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

By analyzing existing cross correlation between Tofas Turk Otomobil and Ufuk Yatirim Yonetim, you can compare the effects of market volatilities on Tofas Turk and Ufuk Yatirim 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 Tofas Turk with a short position of Ufuk Yatirim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tofas Turk and Ufuk Yatirim.

Diversification Opportunities for Tofas Turk and Ufuk Yatirim

0.02

Correlation Coefficient

Tofas Turk  Ufuk Yatirim

Significant diversification

The 3 months correlation between Tofas and Ufuk is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil and Ufuk Yatirim Yonetim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ufuk Yatirim Yonetim and Tofas Turk 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 Tofas Turk Otomobil are associated (or correlated) with Ufuk Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ufuk Yatirim Yonetim has no effect on the direction of Tofas Turk i.e., Tofas Turk and Ufuk Yatirim go up and down completely randomly.

Pair Corralation between Tofas Turk and Ufuk Yatirim

Assuming the 90 days trading horizon Tofas Turk is expected to generate 9.77 times less return on investment than Ufuk Yatirim. But when comparing it to its historical volatility, Tofas Turk Otomobil is 1.42 times less risky than Ufuk Yatirim. It trades about 0.03 of its potential returns per unit of risk. Ufuk Yatirim Yonetim is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  47,800  in Ufuk Yatirim Yonetim on September 26, 2024 and sell it today you would earn a total of  13,300  from holding Ufuk Yatirim Yonetim or generate 27.82% return on investment over 90 days.

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

Tofas Turk Otomobil  vs.  Ufuk Yatirim Yonetim

Tofas Turk Otomobil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tofas Turk Otomobil has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent 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.

Ufuk Yatirim Yonetim

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with Tofas Turk and Ufuk Yatirim

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

The idea behind Tofas Turk Otomobil and Ufuk Yatirim Yonetim 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.