Correlation Between Galata Wind and Pegasus Hava

Can any of the company-specific risk be diversified away by investing in both Galata Wind and Pegasus Hava 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 Galata Wind and Pegasus Hava into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Galata Wind Enerji and Pegasus Hava Tasimaciligi, you can compare the effects of market volatilities on Galata Wind and Pegasus Hava 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 Galata Wind with a short position of Pegasus Hava. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galata Wind and Pegasus Hava.

Diversification Opportunities for Galata Wind and Pegasus Hava

0.89

Correlation Coefficient

Galata Wind  Pegasus Hava

Very poor diversification

The 3 months correlation between Galata and Pegasus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Galata Wind Enerji and Pegasus Hava Tasimaciligi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Hava Tasimaciligi and Galata Wind 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 Galata Wind Enerji are associated (or correlated) with Pegasus Hava. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Hava Tasimaciligi has no effect on the direction of Galata Wind i.e., Galata Wind and Pegasus Hava go up and down completely randomly.

Pair Corralation between Galata Wind and Pegasus Hava

Assuming the 90 days trading horizon Galata Wind Enerji is expected to generate 0.8 times more return on investment than Pegasus Hava. However, Galata Wind Enerji is 1.25 times less risky than Pegasus Hava. It trades about 0.17 of its potential returns per unit of risk. Pegasus Hava Tasimaciligi is currently generating about 0.13 per unit of risk. If you would invest  2,970  in Galata Wind Enerji on April 4, 2024 and sell it today you would earn a total of  218.00  from holding Galata Wind Enerji or generate 7.34% return on investment over 90 days.

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

Galata Wind Enerji  vs.  Pegasus Hava Tasimaciligi

Galata Wind Enerji

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Galata Wind Enerji are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, Galata Wind demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pegasus Hava Tasimaciligi

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pegasus Hava Tasimaciligi are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Pegasus Hava demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galata Wind and Pegasus Hava

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

The idea behind Galata Wind Enerji and Pegasus Hava Tasimaciligi 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.