Correlation Between Akbank TAS and Turkiye Vakiflar

Can any of the company-specific risk be diversified away by investing in both Akbank TAS and Turkiye Vakiflar 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 Akbank TAS and Turkiye Vakiflar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akbank TAS and Turkiye Vakiflar Bankasi, you can compare the effects of market volatilities on Akbank TAS and Turkiye Vakiflar 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 Akbank TAS with a short position of Turkiye Vakiflar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akbank TAS and Turkiye Vakiflar.

Diversification Opportunities for Akbank TAS and Turkiye Vakiflar

0.39

Correlation Coefficient

Akbank TAS  Turkiye Vakiflar

Weak diversification

The 3 months correlation between Akbank and Turkiye is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Akbank TAS and Turkiye Vakiflar Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Vakiflar Bankasi and Akbank TAS 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 Akbank TAS are associated (or correlated) with Turkiye Vakiflar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Vakiflar Bankasi has no effect on the direction of Akbank TAS i.e., Akbank TAS and Turkiye Vakiflar go up and down completely randomly.

Pair Corralation between Akbank TAS and Turkiye Vakiflar

Assuming the 90 days trading horizon Akbank TAS is expected to generate 8.71 times less return on investment than Turkiye Vakiflar. In addition to that, Akbank TAS is 1.1 times more volatile than Turkiye Vakiflar Bankasi. It trades about 0.01 of its total potential returns per unit of risk. Turkiye Vakiflar Bankasi is currently generating about 0.1 per unit of volatility. If you would invest  2,004  in Turkiye Vakiflar Bankasi on September 2, 2024 and sell it today you would earn a total of  314.00  from holding Turkiye Vakiflar Bankasi or generate 15.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Akbank TAS  vs.  Turkiye Vakiflar Bankasi

Akbank TAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akbank TAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Akbank TAS is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Turkiye Vakiflar Bankasi

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Vakiflar Bankasi are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkiye Vakiflar demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akbank TAS and Turkiye Vakiflar

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

The idea behind Akbank TAS and Turkiye Vakiflar 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.