Correlation Between GM and Turkiye Garanti
Can any of the company-specific risk be diversified away by investing in both GM and Turkiye Garanti 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 GM and Turkiye Garanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Turkiye Garanti Bankasi, you can compare the effects of market volatilities on GM and Turkiye Garanti 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 GM with a short position of Turkiye Garanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Turkiye Garanti.
Diversification Opportunities for GM and Turkiye Garanti
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Turkiye is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Turkiye Garanti Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Garanti Bankasi and GM 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 General Motors are associated (or correlated) with Turkiye Garanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Garanti Bankasi has no effect on the direction of GM i.e., GM and Turkiye Garanti go up and down completely randomly.
Pair Corralation between GM and Turkiye Garanti
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.93 times more return on investment than Turkiye Garanti. However, General Motors is 1.08 times less risky than Turkiye Garanti. It trades about 0.08 of its potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about 0.05 per unit of risk. If you would invest 4,551 in General Motors on August 31, 2024 and sell it today you would earn a total of 1,008 from holding General Motors or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.64% |
| Values | Daily Returns |
General Motors vs. Turkiye Garanti Bankasi
Performance |
| Timeline |
| General Motors |
| Turkiye Garanti Bankasi |
GM and Turkiye Garanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Turkiye Garanti
The main advantage of trading using opposite GM and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Turkiye Garanti 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 Garanti will offset losses from the drop in Turkiye Garanti's long position.The idea behind General Motors and Turkiye Garanti Bankasi 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.| Turkiye Garanti vs. Yapi ve Kredi | Turkiye Garanti vs. Turkiye Is Bankasi | Turkiye Garanti vs. Koc Holding AS |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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