Correlation Between Turkiye Is and Garanti Faktoring
Can any of the company-specific risk be diversified away by investing in both Turkiye Is and Garanti Faktoring 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 Is and Garanti Faktoring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turkiye Is Bankasi and Garanti Faktoring AS, you can compare the effects of market volatilities on Turkiye Is and Garanti Faktoring 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 Is with a short position of Garanti Faktoring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Is and Garanti Faktoring.
Diversification Opportunities for Turkiye Is and Garanti Faktoring
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Turkiye and Garanti is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Is Bankasi and Garanti Faktoring AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garanti Faktoring and Turkiye Is 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 Is Bankasi are associated (or correlated) with Garanti Faktoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garanti Faktoring has no effect on the direction of Turkiye Is i.e., Turkiye Is and Garanti Faktoring go up and down completely randomly.
Pair Corralation between Turkiye Is and Garanti Faktoring
Assuming the 90 days trading horizon Turkiye Is is expected to generate 1.85 times less return on investment than Garanti Faktoring. But when comparing it to its historical volatility, Turkiye Is Bankasi is 2.02 times less risky than Garanti Faktoring. It trades about 0.06 of its potential returns per unit of risk. Garanti Faktoring AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 464.00 in Garanti Faktoring AS on August 29, 2024 and sell it today you would earn a total of 1,528 from holding Garanti Faktoring AS or generate 329.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turkiye Is Bankasi vs. Garanti Faktoring AS
Performance |
| Timeline |
| Turkiye Is Bankasi |
| Garanti Faktoring |
Turkiye Is and Garanti Faktoring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turkiye Is and Garanti Faktoring
The main advantage of trading using opposite Turkiye Is and Garanti Faktoring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Is position performs unexpectedly, Garanti Faktoring 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 Garanti Faktoring will offset losses from the drop in Garanti Faktoring's long position.The idea behind Turkiye Is Bankasi and Garanti Faktoring AS 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.| Garanti Faktoring vs. Turkish Airlines | Garanti Faktoring vs. Politeknik Metal Sanayi | Garanti Faktoring vs. Gentas Genel Metal | Garanti Faktoring vs. MEGA METAL |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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