Correlation Between Brisa Bridgestone and Turkish Airlines
Can any of the company-specific risk be diversified away by investing in both Brisa Bridgestone and Turkish Airlines 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 Brisa Bridgestone and Turkish Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brisa Bridgestone Sabanci and Turkish Airlines, you can compare the effects of market volatilities on Brisa Bridgestone and Turkish Airlines 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 Brisa Bridgestone with a short position of Turkish Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brisa Bridgestone and Turkish Airlines.
Diversification Opportunities for Brisa Bridgestone and Turkish Airlines
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brisa and Turkish is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Brisa Bridgestone Sabanci and Turkish Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkish Airlines and Brisa Bridgestone 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 Brisa Bridgestone Sabanci are associated (or correlated) with Turkish Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkish Airlines has no effect on the direction of Brisa Bridgestone i.e., Brisa Bridgestone and Turkish Airlines go up and down completely randomly.
Pair Corralation between Brisa Bridgestone and Turkish Airlines
Assuming the 90 days trading horizon Brisa Bridgestone is expected to generate 1.01 times less return on investment than Turkish Airlines. In addition to that, Brisa Bridgestone is 1.12 times more volatile than Turkish Airlines. It trades about 0.06 of its total potential returns per unit of risk. Turkish Airlines is currently generating about 0.07 per unit of volatility. If you would invest 14,100 in Turkish Airlines on August 30, 2024 and sell it today you would earn a total of 15,150 from holding Turkish Airlines or generate 107.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brisa Bridgestone Sabanci vs. Turkish Airlines
Performance |
| Timeline |
| Brisa Bridgestone Sabanci |
| Turkish Airlines |
Brisa Bridgestone and Turkish Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brisa Bridgestone and Turkish Airlines
The main advantage of trading using opposite Brisa Bridgestone and Turkish Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brisa Bridgestone position performs unexpectedly, Turkish Airlines 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 Turkish Airlines will offset losses from the drop in Turkish Airlines' long position.| Brisa Bridgestone vs. Aksa Akrilik Kimya | Brisa Bridgestone vs. Kordsa Global Endustriyel | Brisa Bridgestone vs. Tofas Turk Otomobil | Brisa Bridgestone vs. Arcelik AS |
| Turkish Airlines vs. Aselsan Elektronik Sanayi | Turkish Airlines vs. Turkiye Petrol Rafinerileri | Turkish Airlines vs. Pegasus Hava Tasimaciligi | Turkish Airlines 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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