Correlation Between Alkim Alkali and Turkiye Garanti

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

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

Diversification Opportunities for Alkim Alkali and Turkiye Garanti

0.54

Correlation Coefficient

Alkim Alkali  Turkiye Garanti

Very weak diversification

The 3 months correlation between Alkim and Turkiye is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Alkim Alkali Kimya 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 Alkim Alkali 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 Alkim Alkali Kimya 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 Alkim Alkali i.e., Alkim Alkali and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Alkim Alkali and Turkiye Garanti

Assuming the 90 days trading horizon Alkim Alkali Kimya is expected to generate 1.23 times more return on investment than Turkiye Garanti. However, Alkim Alkali is 1.23 times more volatile than Turkiye Garanti Bankasi. It trades about 0.14 of its potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about 0.12 per unit of risk. If you would invest  1,681  in Alkim Alkali Kimya on September 25, 2024 and sell it today you would earn a total of  104.00  from holding Alkim Alkali Kimya or generate 6.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Alkim Alkali Kimya  vs.  Turkiye Garanti Bankasi

Alkim Alkali Kimya

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alkim Alkali Kimya are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Alkim Alkali may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Turkiye Garanti Bankasi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Alkim Alkali and Turkiye Garanti

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

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.