Correlation Between Akbank Turk and Moelis

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

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

Diversification Opportunities for Akbank Turk and Moelis

0.47

Correlation Coefficient

Akbank Turk  Moelis

Very weak diversification

The 3 months correlation between Akbank and Moelis is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Akbank Turk Anonim and Moelis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moelis and Akbank Turk 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 Akbank Turk Anonim are associated (or correlated) with Moelis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moelis has no effect on the direction of Akbank Turk i.e., Akbank Turk and Moelis go up and down completely randomly.

Pair Corralation between Akbank Turk and Moelis

Assuming the 90 days horizon Akbank Turk Anonim is expected to generate 1.86 times more return on investment than Moelis. However, Akbank Turk is 1.86 times more volatile than Moelis Co. It trades about 0.06 of its potential returns per unit of risk. Moelis Co is currently generating about 0.07 per unit of risk. If you would invest  151.00  in Akbank Turk Anonim on October 9, 2024 and sell it today you would earn a total of  210.00  from holding Akbank Turk Anonim or generate 139.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.59%
Values	Daily Returns

Akbank Turk Anonim  vs.  Moelis Co

Akbank Turk Anonim

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank Turk Anonim are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Akbank Turk showed solid returns over the last few months and may actually be approaching a breakup point.

Moelis

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Moelis Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Moelis exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akbank Turk and Moelis

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

The idea behind Akbank Turk Anonim and Moelis Co 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.

Check out your portfolio center.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.