Correlation Between Turkish Airlines and MEGA METAL

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

By analyzing existing cross correlation between Turkish Airlines and MEGA METAL, you can compare the effects of market volatilities on Turkish Airlines and MEGA METAL 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 MEGA METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkish Airlines and MEGA METAL.

Diversification Opportunities for Turkish Airlines and MEGA METAL

0.47

Correlation Coefficient

Turkish Airlines  MEGA METAL

Very weak diversification

The 3 months correlation between Turkish and MEGA is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Turkish Airlines and MEGA METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEGA METAL 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 MEGA METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEGA METAL has no effect on the direction of Turkish Airlines i.e., Turkish Airlines and MEGA METAL go up and down completely randomly.

Pair Corralation between Turkish Airlines and MEGA METAL

Assuming the 90 days trading horizon Turkish Airlines is expected to generate 1.5 times more return on investment than MEGA METAL. However, Turkish Airlines is 1.5 times more volatile than MEGA METAL. It trades about 0.06 of its potential returns per unit of risk. MEGA METAL is currently generating about -0.03 per unit of risk. If you would invest  28,375  in Turkish Airlines on April 4, 2025 and sell it today you would earn a total of  775.00  from holding Turkish Airlines or generate 2.73% return on investment over 90 days.

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

Turkish Airlines  vs.  MEGA METAL

Turkish Airlines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkish Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Turkish Airlines is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

MEGA METAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days MEGA METAL 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 forward indicators remain fairly strong which may send shares a bit higher in August 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Turkish Airlines and MEGA METAL

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

The idea behind Turkish Airlines and MEGA METAL 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.