Correlation Between Turkiye Garanti and Tumosan

Can any of the company-specific risk be diversified away by investing in both Turkiye Garanti and Tumosan 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 Tumosan 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 Tumosan Motor ve, you can compare the effects of market volatilities on Turkiye Garanti and Tumosan 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 Tumosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Garanti and Tumosan.

Diversification Opportunities for Turkiye Garanti and Tumosan

0.09

Correlation Coefficient

Turkiye Garanti  Tumosan

Significant diversification

The 3 months correlation between Turkiye and Tumosan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Tumosan Motor ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tumosan Motor ve 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 Tumosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tumosan Motor ve has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Tumosan go up and down completely randomly.

Pair Corralation between Turkiye Garanti and Tumosan

Assuming the 90 days trading horizon Turkiye Garanti Bankasi is expected to generate 0.9 times more return on investment than Tumosan. However, Turkiye Garanti Bankasi is 1.11 times less risky than Tumosan. It trades about 0.07 of its potential returns per unit of risk. Tumosan Motor ve is currently generating about -0.03 per unit of risk. If you would invest  11,350  in Turkiye Garanti Bankasi on September 5, 2024 and sell it today you would earn a total of  1,120  from holding Turkiye Garanti Bankasi or generate 9.87% return on investment over 90 days.

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

Turkiye Garanti Bankasi  vs.  Tumosan Motor ve

Turkiye Garanti Bankasi

Risk-Adjusted Performance

5 of 100

Modest

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

Tumosan Motor ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tumosan Motor ve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tumosan is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Turkiye Garanti and Tumosan

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

The idea behind Turkiye Garanti Bankasi and Tumosan Motor ve 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.