Correlation Between Turkish Airlines and Peker Gayrimenkul

Can any of the company-specific risk be diversified away by investing in both Turkish Airlines and Peker Gayrimenkul 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 Turkish Airlines and Peker Gayrimenkul into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turkish Airlines and Peker Gayrimenkul Yatirim, you can compare the effects of market volatilities on Turkish Airlines and Peker Gayrimenkul 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 Turkish Airlines with a short position of Peker Gayrimenkul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkish Airlines and Peker Gayrimenkul.

Diversification Opportunities for Turkish Airlines and Peker Gayrimenkul

-0.82

Correlation Coefficient

Turkish Airlines  Peker Gayrimenkul

Pay attention - limited upside

The 3 months correlation between Turkish and Peker is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Turkish Airlines and Peker Gayrimenkul Yatirim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peker Gayrimenkul Yatirim and Turkish Airlines 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 Turkish Airlines are associated (or correlated) with Peker Gayrimenkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peker Gayrimenkul Yatirim has no effect on the direction of Turkish Airlines i.e., Turkish Airlines and Peker Gayrimenkul go up and down completely randomly.

Pair Corralation between Turkish Airlines and Peker Gayrimenkul

Assuming the 90 days trading horizon Turkish Airlines is expected to generate 0.31 times more return on investment than Peker Gayrimenkul. However, Turkish Airlines is 3.26 times less risky than Peker Gayrimenkul. It trades about 0.11 of its potential returns per unit of risk. Peker Gayrimenkul Yatirim is currently generating about -0.3 per unit of risk. If you would invest  27,025  in Turkish Airlines on March 15, 2024 and sell it today you would earn a total of  3,475  from holding Turkish Airlines or generate 12.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Turkish Airlines  vs.  Peker Gayrimenkul Yatirim

Turkish Airlines

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turkish Airlines are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Turkish Airlines demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Peker Gayrimenkul Yatirim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peker Gayrimenkul Yatirim has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Turkish Airlines and Peker Gayrimenkul

The main advantage of trading using opposite Turkish Airlines and Peker Gayrimenkul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkish Airlines position performs unexpectedly, Peker Gayrimenkul 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 Peker Gayrimenkul will offset losses from the drop in Peker Gayrimenkul's long position.

The idea behind Turkish Airlines and Peker Gayrimenkul Yatirim pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.