Correlation Between Turkiye Garanti and Alkim Alkali

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

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

Diversification Opportunities for Turkiye Garanti and Alkim Alkali

0.54

Correlation Coefficient

Turkiye Garanti  Alkim Alkali

Very weak diversification

The 3 months correlation between Turkiye and Alkim is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Alkim Alkali Kimya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Alkali Kimya and Turkiye Garanti 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 Turkiye Garanti Bankasi are associated (or correlated) with Alkim Alkali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Alkali Kimya has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Alkim Alkali go up and down completely randomly.

Pair Corralation between Turkiye Garanti and Alkim Alkali

Assuming the 90 days trading horizon Turkiye Garanti is expected to generate 1.39 times less return on investment than Alkim Alkali. But when comparing it to its historical volatility, Turkiye Garanti Bankasi is 1.23 times less risky than Alkim Alkali. It trades about 0.12 of its potential returns per unit of risk. Alkim Alkali Kimya is currently generating about 0.14 of returns per unit of risk over similar time horizon. 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

Turkiye Garanti Bankasi  vs.  Alkim Alkali Kimya

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.

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.

Pair Trading with Turkiye Garanti and Alkim Alkali

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

The idea behind Turkiye Garanti Bankasi and Alkim Alkali Kimya 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.