Correlation Between Bosch Fren and Akbank TAS

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

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

Diversification Opportunities for Bosch Fren and Akbank TAS

-0.47

Correlation Coefficient

Bosch Fren  Akbank TAS

Very good diversification

The 3 months correlation between Bosch and Akbank is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bosch Fren Sistemleri and Akbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank TAS and Bosch Fren 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 Bosch Fren Sistemleri 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 Bosch Fren i.e., Bosch Fren and Akbank TAS go up and down completely randomly.

Pair Corralation between Bosch Fren and Akbank TAS

Assuming the 90 days trading horizon Bosch Fren Sistemleri is expected to under-perform the Akbank TAS. But the stock apears to be less risky and, when comparing its historical volatility, Bosch Fren Sistemleri is 2.4 times less risky than Akbank TAS. The stock trades about -0.34 of its potential returns per unit of risk. The Akbank TAS is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  5,355  in Akbank TAS on September 20, 2024 and sell it today you would earn a total of  935.00  from holding Akbank TAS or generate 17.46% return on investment over 90 days.

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

Bosch Fren Sistemleri  vs.  Akbank TAS

Bosch Fren Sistemleri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bosch Fren Sistemleri 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

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank TAS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Akbank TAS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bosch Fren and Akbank TAS

The main advantage of trading using opposite Bosch Fren and Akbank TAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosch Fren 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 Bosch Fren Sistemleri 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.