Correlation Between China Merchants and Akbank Turk
Can any of the company-specific risk be diversified away by investing in both China Merchants and Akbank Turk 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 China Merchants and Akbank Turk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Merchants Bank and Akbank Turk Anonim, you can compare the effects of market volatilities on China Merchants and Akbank Turk 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 China Merchants with a short position of Akbank Turk. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Akbank Turk.
Diversification Opportunities for China Merchants and Akbank Turk
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Akbank is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Akbank Turk Anonim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank Turk Anonim and China Merchants 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 China Merchants Bank are associated (or correlated) with Akbank Turk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank Turk Anonim has no effect on the direction of China Merchants i.e., China Merchants and Akbank Turk go up and down completely randomly.
Pair Corralation between China Merchants and Akbank Turk
Assuming the 90 days horizon China Merchants Bank is expected to under-perform the Akbank Turk. But the pink sheet apears to be less risky and, when comparing its historical volatility, China Merchants Bank is 1.54 times less risky than Akbank Turk. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Akbank Turk Anonim is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 285.00 in Akbank Turk Anonim on August 31, 2024 and sell it today you would earn a total of 61.00 from holding Akbank Turk Anonim or generate 21.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Akbank Turk Anonim
Performance |
| Timeline |
| China Merchants Bank |
| Akbank Turk Anonim |
China Merchants and Akbank Turk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Akbank Turk
The main advantage of trading using opposite China Merchants and Akbank Turk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Akbank Turk 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 Akbank Turk will offset losses from the drop in Akbank Turk's long position.| China Merchants vs. China Everbright Bank | China Merchants vs. China Merchants Bank | China Merchants vs. Postal Savings Bank | China Merchants vs. China Citic Bank |
| Akbank Turk vs. Bank Mandiri Persero | Akbank Turk vs. Piraeus Bank SA | Akbank Turk vs. Kasikornbank Public Co | Akbank Turk vs. Turkiye Garanti Bankasi |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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