Correlation Between Tofas Turk and Migros Ticaret
Can any of the company-specific risk be diversified away by investing in both Tofas Turk and Migros Ticaret 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 Migros Ticaret 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 Migros Ticaret AS, you can compare the effects of market volatilities on Tofas Turk and Migros Ticaret 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 Migros Ticaret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tofas Turk and Migros Ticaret.
Diversification Opportunities for Tofas Turk and Migros Ticaret
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tofas and Migros is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil and Migros Ticaret AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migros Ticaret AS 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 Migros Ticaret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Migros Ticaret AS has no effect on the direction of Tofas Turk i.e., Tofas Turk and Migros Ticaret go up and down completely randomly.
Pair Corralation between Tofas Turk and Migros Ticaret
Assuming the 90 days trading horizon Tofas Turk is expected to generate 2.45 times less return on investment than Migros Ticaret. But when comparing it to its historical volatility, Tofas Turk Otomobil is 1.29 times less risky than Migros Ticaret. It trades about 0.14 of its potential returns per unit of risk. Migros Ticaret AS is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 41,311 in Migros Ticaret AS on September 2, 2024 and sell it today you would earn a total of 7,014 from holding Migros Ticaret AS or generate 16.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tofas Turk Otomobil vs. Migros Ticaret AS
Performance |
| Timeline |
| Tofas Turk Otomobil |
| Migros Ticaret AS |
Tofas Turk and Migros Ticaret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tofas Turk and Migros Ticaret
The main advantage of trading using opposite Tofas Turk and Migros Ticaret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tofas Turk position performs unexpectedly, Migros Ticaret 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 Migros Ticaret will offset losses from the drop in Migros Ticaret'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 |
| Migros Ticaret vs. Eregli Demir ve | Migros Ticaret vs. Turkiye Petrol Rafinerileri | Migros Ticaret vs. Turkiye Sise ve | Migros Ticaret vs. Ford Otomotiv Sanayi |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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