Correlation Between Akbank Turk and Turkiye Garanti

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

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

Diversification Opportunities for Akbank Turk and Turkiye Garanti

0.67

Correlation Coefficient

Akbank Turk  Turkiye Garanti

Poor diversification

The 3 months correlation between Akbank and Turkiye is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Akbank Turk Anonim 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 Akbank Turk 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 Turk Anonim 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 Akbank Turk i.e., Akbank Turk and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Akbank Turk and Turkiye Garanti

Assuming the 90 days horizon Akbank Turk is expected to generate 5.61 times less return on investment than Turkiye Garanti. In addition to that, Akbank Turk is 1.26 times more volatile than Turkiye Garanti Bankasi. It trades about 0.01 of its total potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about 0.05 per unit of volatility. If you would invest  330.00  in Turkiye Garanti Bankasi on September 2, 2024 and sell it today you would earn a total of  25.00  from holding Turkiye Garanti Bankasi or generate 7.58% return on investment over 90 days.

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

Akbank Turk Anonim  vs.  Turkiye Garanti Bankasi

Akbank Turk Anonim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akbank Turk Anonim has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Akbank Turk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Turkiye Garanti Bankasi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Turkiye Garanti may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Akbank Turk and Turkiye Garanti

The main advantage of trading using opposite Akbank Turk and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akbank Turk 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 Akbank Turk Anonim 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.