Correlation Between Turkiye Sinai and Anadolu Efes

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

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

Diversification Opportunities for Turkiye Sinai and Anadolu Efes

0.66

Correlation Coefficient

Turkiye Sinai  Anadolu Efes

Poor diversification

The 3 months correlation between Turkiye and Anadolu is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Sinai Kalkinma and Anadolu Efes Biracilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadolu Efes Biracilik and Turkiye Sinai 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 Sinai Kalkinma are associated (or correlated) with Anadolu Efes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anadolu Efes Biracilik has no effect on the direction of Turkiye Sinai i.e., Turkiye Sinai and Anadolu Efes go up and down completely randomly.

Pair Corralation between Turkiye Sinai and Anadolu Efes

Assuming the 90 days trading horizon Turkiye Sinai is expected to generate 1.19 times less return on investment than Anadolu Efes. But when comparing it to its historical volatility, Turkiye Sinai Kalkinma is 1.53 times less risky than Anadolu Efes. It trades about 0.07 of its potential returns per unit of risk. Anadolu Efes Biracilik is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  21,040  in Anadolu Efes Biracilik on September 13, 2024 and sell it today you would earn a total of  1,700  from holding Anadolu Efes Biracilik or generate 8.08% return on investment over 90 days.

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

Turkiye Sinai Kalkinma  vs.  Anadolu Efes Biracilik

Turkiye Sinai Kalkinma

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Sinai Kalkinma are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Turkiye Sinai may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Anadolu Efes Biracilik

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anadolu Efes Biracilik are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Anadolu Efes may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Turkiye Sinai and Anadolu Efes

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

The idea behind Turkiye Sinai Kalkinma and Anadolu Efes Biracilik 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.