Correlation Between Bosch Fren and Turkiye Halk

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

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

Diversification Opportunities for Bosch Fren and Turkiye Halk

0.25

Correlation Coefficient

Bosch Fren  Turkiye Halk

Modest diversification

The 3 months correlation between Bosch and Turkiye is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bosch Fren Sistemleri and Turkiye Halk Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Halk Bankasi and Bosch Fren 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 Bosch Fren Sistemleri are associated (or correlated) with Turkiye Halk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Halk Bankasi has no effect on the direction of Bosch Fren i.e., Bosch Fren and Turkiye Halk go up and down completely randomly.

Pair Corralation between Bosch Fren and Turkiye Halk

Assuming the 90 days trading horizon Bosch Fren Sistemleri is expected to under-perform the Turkiye Halk. But the stock apears to be less risky and, when comparing its historical volatility, Bosch Fren Sistemleri is 1.18 times less risky than Turkiye Halk. The stock trades about 0.0 of its potential returns per unit of risk. The Turkiye Halk Bankasi is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,630  in Turkiye Halk Bankasi on December 29, 2024 and sell it today you would earn a total of  498.00  from holding Turkiye Halk Bankasi or generate 30.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Bosch Fren Sistemleri  vs.  Turkiye Halk Bankasi

Bosch Fren Sistemleri

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bosch Fren Sistemleri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Bosch Fren is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Turkiye Halk Bankasi

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Halk Bankasi are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkiye Halk demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bosch Fren and Turkiye Halk

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

The idea behind Bosch Fren Sistemleri and Turkiye Halk 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.