Correlation Between Turkiye Garanti and Turkish Airlines
Can any of the company-specific risk be diversified away by investing in both Turkiye Garanti and Turkish Airlines 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 Turkiye Garanti and Turkish Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turkiye Garanti Bankasi and Turkish Airlines, you can compare the effects of market volatilities on Turkiye Garanti and Turkish Airlines 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 Turkiye Garanti with a short position of Turkish Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Garanti and Turkish Airlines.
Diversification Opportunities for Turkiye Garanti and Turkish Airlines
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Turkiye and Turkish is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Turkish Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkish Airlines and Turkiye Garanti 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 Turkiye Garanti Bankasi are associated (or correlated) with Turkish Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkish Airlines has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Turkish Airlines go up and down completely randomly.
Pair Corralation between Turkiye Garanti and Turkish Airlines
Assuming the 90 days trading horizon Turkiye Garanti Bankasi is expected to under-perform the Turkish Airlines. In addition to that, Turkiye Garanti is 1.27 times more volatile than Turkish Airlines. It trades about -0.01 of its total potential returns per unit of risk. Turkish Airlines is currently generating about 0.04 per unit of volatility. If you would invest 28,500 in Turkish Airlines on August 30, 2024 and sell it today you would earn a total of 750.00 from holding Turkish Airlines or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turkiye Garanti Bankasi vs. Turkish Airlines
Performance |
| Timeline |
| Turkiye Garanti Bankasi |
| Turkish Airlines |
Turkiye Garanti and Turkish Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turkiye Garanti and Turkish Airlines
The main advantage of trading using opposite Turkiye Garanti and Turkish Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Garanti position performs unexpectedly, Turkish Airlines 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 Turkish Airlines will offset losses from the drop in Turkish Airlines' long position.| Turkiye Garanti vs. Akbank TAS | Turkiye Garanti vs. Turkish Airlines | Turkiye Garanti vs. Koc Holding AS |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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