Correlation Between Turkiye Sise and Eregli Demir
Can any of the company-specific risk be diversified away by investing in both Turkiye Sise and Eregli Demir 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 Sise and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turkiye Sise ve and Eregli Demir ve, you can compare the effects of market volatilities on Turkiye Sise and Eregli Demir 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 Sise with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Sise and Eregli Demir.
Diversification Opportunities for Turkiye Sise and Eregli Demir
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Turkiye and Eregli is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Sise ve and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and Turkiye Sise 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 Sise ve are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Turkiye Sise i.e., Turkiye Sise and Eregli Demir go up and down completely randomly.
Pair Corralation between Turkiye Sise and Eregli Demir
Assuming the 90 days trading horizon Turkiye Sise ve is expected to under-perform the Eregli Demir. But the stock apears to be less risky and, when comparing its historical volatility, Turkiye Sise ve is 1.13 times less risky than Eregli Demir. The stock trades about -0.33 of its potential returns per unit of risk. The Eregli Demir ve is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 2,270 in Eregli Demir ve on January 24, 2025 and sell it today you would lose (144.00) from holding Eregli Demir ve or give up 6.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turkiye Sise ve vs. Eregli Demir ve
Performance |
| Timeline |
| Turkiye Sise ve |
| Eregli Demir ve |
Turkiye Sise and Eregli Demir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turkiye Sise and Eregli Demir
The main advantage of trading using opposite Turkiye Sise and Eregli Demir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Sise position performs unexpectedly, Eregli Demir 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 Eregli Demir will offset losses from the drop in Eregli Demir's long position.| Turkiye Sise vs. Eregli Demir ve | Turkiye Sise vs. Turkiye Petrol Rafinerileri | Turkiye Sise vs. Turkish Airlines | Turkiye Sise vs. Ford Otomotiv Sanayi |
| Eregli Demir vs. Turkiye Sise ve | Eregli Demir vs. Turkiye Petrol Rafinerileri | Eregli Demir vs. Ford Otomotiv Sanayi | Eregli Demir vs. Petkim Petrokimya Holding |
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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