Correlation Between Tofas Turk and Brisa Bridgestone
Can any of the company-specific risk be diversified away by investing in both Tofas Turk and Brisa Bridgestone 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 Tofas Turk and Brisa Bridgestone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tofas Turk Otomobil and Brisa Bridgestone Sabanci, you can compare the effects of market volatilities on Tofas Turk and Brisa Bridgestone 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 Tofas Turk with a short position of Brisa Bridgestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tofas Turk and Brisa Bridgestone.
Diversification Opportunities for Tofas Turk and Brisa Bridgestone
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tofas and Brisa is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil and Brisa Bridgestone Sabanci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brisa Bridgestone Sabanci and Tofas Turk 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 Tofas Turk Otomobil are associated (or correlated) with Brisa Bridgestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brisa Bridgestone Sabanci has no effect on the direction of Tofas Turk i.e., Tofas Turk and Brisa Bridgestone go up and down completely randomly.
Pair Corralation between Tofas Turk and Brisa Bridgestone
Assuming the 90 days trading horizon Tofas Turk Otomobil is expected to under-perform the Brisa Bridgestone. But the stock apears to be less risky and, when comparing its historical volatility, Tofas Turk Otomobil is 1.2 times less risky than Brisa Bridgestone. The stock trades about 0.0 of its potential returns per unit of risk. The Brisa Bridgestone Sabanci is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,079 in Brisa Bridgestone Sabanci on August 28, 2024 and sell it today you would earn a total of 3,721 from holding Brisa Bridgestone Sabanci or generate 61.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tofas Turk Otomobil vs. Brisa Bridgestone Sabanci
Performance |
| Timeline |
| Tofas Turk Otomobil |
| Brisa Bridgestone Sabanci |
Tofas Turk and Brisa Bridgestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tofas Turk and Brisa Bridgestone
The main advantage of trading using opposite Tofas Turk and Brisa Bridgestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tofas Turk position performs unexpectedly, Brisa Bridgestone 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 Brisa Bridgestone will offset losses from the drop in Brisa Bridgestone's long position.| Tofas Turk vs. Ford Otomotiv Sanayi | Tofas Turk vs. Eregli Demir ve | Tofas Turk vs. Turkiye Petrol Rafinerileri | Tofas Turk vs. Turkiye Sise ve |
| Brisa Bridgestone vs. Aksa Akrilik Kimya | Brisa Bridgestone vs. Kordsa Global Endustriyel | Brisa Bridgestone vs. Tofas Turk Otomobil | Brisa Bridgestone vs. Arcelik AS |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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