Correlation Between Turkiye Sinai and ENKA Insaat

Can any of the company-specific risk be diversified away by investing in both Turkiye Sinai and ENKA Insaat 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 ENKA Insaat 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 ENKA Insaat ve, you can compare the effects of market volatilities on Turkiye Sinai and ENKA Insaat 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 ENKA Insaat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Sinai and ENKA Insaat.

Diversification Opportunities for Turkiye Sinai and ENKA Insaat

0.83

Correlation Coefficient

Turkiye Sinai  ENKA Insaat

Very poor diversification

The 3 months correlation between Turkiye and ENKA is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Sinai Kalkinma and ENKA Insaat ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENKA Insaat ve 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 ENKA Insaat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENKA Insaat ve has no effect on the direction of Turkiye Sinai i.e., Turkiye Sinai and ENKA Insaat go up and down completely randomly.

Pair Corralation between Turkiye Sinai and ENKA Insaat

Assuming the 90 days trading horizon Turkiye Sinai Kalkinma is expected to generate 0.75 times more return on investment than ENKA Insaat. However, Turkiye Sinai Kalkinma is 1.34 times less risky than ENKA Insaat. It trades about 0.05 of its potential returns per unit of risk. ENKA Insaat ve is currently generating about 0.03 per unit of risk. If you would invest  1,213  in Turkiye Sinai Kalkinma on September 5, 2024 and sell it today you would earn a total of  57.00  from holding Turkiye Sinai Kalkinma or generate 4.7% return on investment over 90 days.

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

Turkiye Sinai Kalkinma  vs.  ENKA Insaat ve

Turkiye Sinai Kalkinma

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Sinai Kalkinma are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Turkiye Sinai is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ENKA Insaat ve

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ENKA Insaat ve are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, ENKA Insaat is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Turkiye Sinai and ENKA Insaat

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

The idea behind Turkiye Sinai Kalkinma and ENKA Insaat 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.