Correlation Between Dogu Aras and Akbank TAS

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

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

Diversification Opportunities for Dogu Aras and Akbank TAS

-0.26

Correlation Coefficient

Dogu Aras  Akbank TAS

Very good diversification

The 3 months correlation between Dogu and Akbank is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dogu Aras Enerji and Akbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank TAS and Dogu Aras 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 Dogu Aras Enerji are associated (or correlated) with Akbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank TAS has no effect on the direction of Dogu Aras i.e., Dogu Aras and Akbank TAS go up and down completely randomly.

Pair Corralation between Dogu Aras and Akbank TAS

Assuming the 90 days trading horizon Dogu Aras Enerji is expected to under-perform the Akbank TAS. But the stock apears to be less risky and, when comparing its historical volatility, Dogu Aras Enerji is 1.31 times less risky than Akbank TAS. The stock trades about -0.07 of its potential returns per unit of risk. The Akbank TAS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  6,125  in Akbank TAS on September 22, 2024 and sell it today you would lose (55.00) from holding Akbank TAS or give up 0.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Dogu Aras Enerji  vs.  Akbank TAS

Dogu Aras Enerji

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dogu Aras Enerji has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

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.

Pair Trading with Dogu Aras and Akbank TAS

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

The idea behind Dogu Aras Enerji and Akbank TAS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.