Correlation Between Turk Traktor and Vestel Beyaz
Can any of the company-specific risk be diversified away by investing in both Turk Traktor and Vestel Beyaz 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 Turk Traktor and Vestel Beyaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turk Traktor ve and Vestel Beyaz Esya, you can compare the effects of market volatilities on Turk Traktor and Vestel Beyaz 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 Turk Traktor with a short position of Vestel Beyaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turk Traktor and Vestel Beyaz.
Diversification Opportunities for Turk Traktor and Vestel Beyaz
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Turk and Vestel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Turk Traktor ve and Vestel Beyaz Esya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestel Beyaz Esya and Turk Traktor 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 Turk Traktor ve are associated (or correlated) with Vestel Beyaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestel Beyaz Esya has no effect on the direction of Turk Traktor i.e., Turk Traktor and Vestel Beyaz go up and down completely randomly.
Pair Corralation between Turk Traktor and Vestel Beyaz
Assuming the 90 days trading horizon Turk Traktor ve is expected to generate 0.95 times more return on investment than Vestel Beyaz. However, Turk Traktor ve is 1.05 times less risky than Vestel Beyaz. It trades about -0.42 of its potential returns per unit of risk. Vestel Beyaz Esya is currently generating about -0.47 per unit of risk. If you would invest 75,000 in Turk Traktor ve on November 1, 2024 and sell it today you would lose (7,000) from holding Turk Traktor ve or give up 9.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Turk Traktor ve vs. Vestel Beyaz Esya
Performance |
| Timeline |
| Turk Traktor ve |
| Vestel Beyaz Esya |
Turk Traktor and Vestel Beyaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turk Traktor and Vestel Beyaz
The main advantage of trading using opposite Turk Traktor and Vestel Beyaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turk Traktor position performs unexpectedly, Vestel Beyaz 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 Vestel Beyaz will offset losses from the drop in Vestel Beyaz's long position.| Turk Traktor vs. Ford Otomotiv Sanayi | Turk Traktor vs. Tofas Turk Otomobil | Turk Traktor vs. Eregli Demir ve | Turk Traktor vs. Turkiye Petrol Rafinerileri |
| Vestel Beyaz vs. Eregli Demir ve | Vestel Beyaz vs. Turkiye Sise ve | Vestel Beyaz vs. Ford Otomotiv Sanayi | Vestel Beyaz vs. Aksa Akrilik Kimya |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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