Correlation Between Anadolu Efes and Turkiye Garanti

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

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

Diversification Opportunities for Anadolu Efes and Turkiye Garanti

0.17

Correlation Coefficient

Anadolu Efes  Turkiye Garanti

Average diversification

The 3 months correlation between Anadolu and Turkiye is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Anadolu Efes Biracilik 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 Anadolu Efes 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 Anadolu Efes Biracilik 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 Anadolu Efes i.e., Anadolu Efes and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Anadolu Efes and Turkiye Garanti

Assuming the 90 days horizon Anadolu Efes Biracilik is expected to under-perform the Turkiye Garanti. In addition to that, Anadolu Efes is 1.15 times more volatile than Turkiye Garanti Bankasi. It trades about -0.1 of its total potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about -0.04 per unit of volatility. If you would invest  360.00  in Turkiye Garanti Bankasi on December 29, 2024 and sell it today you would lose (44.00) from holding Turkiye Garanti Bankasi or give up 12.22% of portfolio value over 90 days.

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

Anadolu Efes Biracilik  vs.  Turkiye Garanti Bankasi

Anadolu Efes Biracilik

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anadolu Efes Biracilik has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Turkiye Garanti Bankasi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkiye Garanti Bankasi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Anadolu Efes and Turkiye Garanti

The main advantage of trading using opposite Anadolu Efes and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anadolu Efes 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 Anadolu Efes Biracilik 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.