Correlation Between Turk Telekomunikasyon and Tofas Turk
Can any of the company-specific risk be diversified away by investing in both Turk Telekomunikasyon and Tofas Turk 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 Tofas Turk 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 Tofas Turk Otomobil, you can compare the effects of market volatilities on Turk Telekomunikasyon and Tofas Turk 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 Tofas Turk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turk Telekomunikasyon and Tofas Turk.
Diversification Opportunities for Turk Telekomunikasyon and Tofas Turk
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Turk and Tofas is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Turk Telekomunikasyon AS and Tofas Turk Otomobil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tofas Turk Otomobil 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 Tofas Turk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tofas Turk Otomobil has no effect on the direction of Turk Telekomunikasyon i.e., Turk Telekomunikasyon and Tofas Turk go up and down completely randomly.
Pair Corralation between Turk Telekomunikasyon and Tofas Turk
Assuming the 90 days trading horizon Turk Telekomunikasyon AS is expected to generate 1.41 times more return on investment than Tofas Turk. However, Turk Telekomunikasyon is 1.41 times more volatile than Tofas Turk Otomobil. It trades about 0.34 of its potential returns per unit of risk. Tofas Turk Otomobil is currently generating about 0.2 per unit of risk. If you would invest 3,052 in Turk Telekomunikasyon AS on February 21, 2024 and sell it today you would earn a total of 1,294 from holding Turk Telekomunikasyon AS or generate 42.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Turk Telekomunikasyon AS vs. Tofas Turk Otomobil
Performance |
Timeline |
Turk Telekomunikasyon |
Tofas Turk Otomobil |
Turk Telekomunikasyon and Tofas Turk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Turk Telekomunikasyon and Tofas Turk
The main advantage of trading using opposite Turk Telekomunikasyon and Tofas Turk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turk Telekomunikasyon position performs unexpectedly, Tofas Turk 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 Tofas Turk will offset losses from the drop in Tofas Turk's long position.Turk Telekomunikasyon vs. Akbank TAS | Turk Telekomunikasyon vs. Haci Omer Sabanci | Turk Telekomunikasyon vs. Turkiye Is Bankasi | Turk Telekomunikasyon vs. Turkiye Is Bankasi |
Tofas Turk vs. Haci Omer Sabanci | Tofas Turk vs. AG Anadolu Group | Tofas Turk vs. Turkish Airlines | Tofas Turk vs. Turkiye Sise ve |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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