Correlation Between Tofas Turk and Turkiye Sise

Can any of the company-specific risk be diversified away by investing in both Tofas Turk and Turkiye Sise 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 Turkiye Sise 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 Turkiye Sise ve, you can compare the effects of market volatilities on Tofas Turk and Turkiye Sise 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 Turkiye Sise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tofas Turk and Turkiye Sise.

Diversification Opportunities for Tofas Turk and Turkiye Sise

0.79

Correlation Coefficient

Tofas Turk  Turkiye Sise

Poor diversification

The 3 months correlation between Tofas and Turkiye is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tofas Turk Otomobil and Turkiye Sise ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Sise ve 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 Turkiye Sise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Sise ve has no effect on the direction of Tofas Turk i.e., Tofas Turk and Turkiye Sise go up and down completely randomly.

Pair Corralation between Tofas Turk and Turkiye Sise

Assuming the 90 days trading horizon Tofas Turk Otomobil is expected to generate 1.3 times more return on investment than Turkiye Sise. However, Tofas Turk is 1.3 times more volatile than Turkiye Sise ve. It trades about 0.06 of its potential returns per unit of risk. Turkiye Sise ve is currently generating about 0.05 per unit of risk. If you would invest  19,410  in Tofas Turk Otomobil on April 21, 2025 and sell it today you would earn a total of  1,680  from holding Tofas Turk Otomobil or generate 8.66% 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.  Turkiye Sise ve

Tofas Turk Otomobil

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tofas Turk Otomobil are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Tofas Turk may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Turkiye Sise ve

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Sise ve are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Turkiye Sise may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Tofas Turk and Turkiye Sise

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

The idea behind Tofas Turk Otomobil and Turkiye Sise ve 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.