Correlation Between Turk Telekomunikasyon and Coca Cola

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

By analyzing existing cross correlation between Turk Telekomunikasyon AS and Coca Cola Icecek AS, you can compare the effects of market volatilities on Turk Telekomunikasyon and Coca Cola 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 Turk Telekomunikasyon with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turk Telekomunikasyon and Coca Cola.

Diversification Opportunities for Turk Telekomunikasyon and Coca Cola

0.97

Correlation Coefficient

Turk Telekomunikasyon  Coca Cola

Almost no diversification

The 3 months correlation between Turk and Coca is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Turk Telekomunikasyon AS and Coca Cola Icecek AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Icecek and Turk Telekomunikasyon 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 Turk Telekomunikasyon AS are associated (or correlated) with Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola Icecek has no effect on the direction of Turk Telekomunikasyon i.e., Turk Telekomunikasyon and Coca Cola go up and down completely randomly.

Pair Corralation between Turk Telekomunikasyon and Coca Cola

Assuming the 90 days trading horizon Turk Telekomunikasyon AS is expected to generate 1.53 times more return on investment than Coca Cola. However, Turk Telekomunikasyon is 1.53 times more volatile than Coca Cola Icecek AS. It trades about 0.24 of its potential returns per unit of risk. Coca Cola Icecek AS is currently generating about 0.32 per unit of risk. If you would invest  3,654  in Turk Telekomunikasyon AS on March 11, 2024 and sell it today you would earn a total of  946.00  from holding Turk Telekomunikasyon AS or generate 25.89% return on investment over 90 days.

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

Turk Telekomunikasyon AS  vs.  Coca Cola Icecek AS

Turk Telekomunikasyon

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turk Telekomunikasyon AS are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, Turk Telekomunikasyon demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Coca Cola Icecek

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola Icecek AS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Coca Cola demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turk Telekomunikasyon and Coca Cola

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

The idea behind Turk Telekomunikasyon AS and Coca Cola Icecek AS 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.