Correlation Between Akbank Turk and Southern California

Can any of the company-specific risk be diversified away by investing in both Akbank Turk and Southern California 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 Southern California 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 Southern California Gas, you can compare the effects of market volatilities on Akbank Turk and Southern California 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 Southern California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akbank Turk and Southern California.

Diversification Opportunities for Akbank Turk and Southern California

-0.11

Correlation Coefficient

Akbank Turk  Southern California

Good diversification

The 3 months correlation between Akbank and Southern is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Akbank Turk Anonim and Southern California Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern California Gas 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 Southern California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern California Gas has no effect on the direction of Akbank Turk i.e., Akbank Turk and Southern California go up and down completely randomly.

Pair Corralation between Akbank Turk and Southern California

Assuming the 90 days horizon Akbank Turk Anonim is expected to under-perform the Southern California. In addition to that, Akbank Turk is 2.12 times more volatile than Southern California Gas. It trades about -0.01 of its total potential returns per unit of risk. Southern California Gas is currently generating about 0.02 per unit of volatility. If you would invest  2,525  in Southern California Gas on December 21, 2024 and sell it today you would earn a total of  23.00  from holding Southern California Gas or generate 0.91% return on investment over 90 days.

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

Akbank Turk Anonim  vs.  Southern California Gas

Akbank Turk Anonim

Risk-Adjusted Performance

Very Weak

Over the last 90 days Akbank Turk Anonim has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Akbank Turk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Southern California Gas

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Southern California Gas are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Southern California is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Akbank Turk and Southern California

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

The idea behind Akbank Turk Anonim and Southern California Gas 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.