Correlation Between Commercial International and Turkiye Garanti

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

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

Diversification Opportunities for Commercial International and Turkiye Garanti

-0.15

Correlation Coefficient

Commercial International  Turkiye Garanti

Good diversification

The 3 months correlation between Commercial and Turkiye is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank 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 Commercial International 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 Commercial International Bank 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 Commercial International i.e., Commercial International and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Commercial International and Turkiye Garanti

Assuming the 90 days horizon Commercial International Bank is expected to under-perform the Turkiye Garanti. But the otc stock apears to be less risky and, when comparing its historical volatility, Commercial International Bank is 3.1 times less risky than Turkiye Garanti. The otc stock trades about -0.38 of its potential returns per unit of risk. The Turkiye Garanti Bankasi is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  370.00  in Turkiye Garanti Bankasi on October 10, 2024 and sell it today you would lose (13.00) from holding Turkiye Garanti Bankasi or give up 3.51% of portfolio value over 90 days.

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

Commercial International Bank  vs.  Turkiye Garanti Bankasi

Commercial International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Turkiye Garanti Bankasi

Risk-Adjusted Performance

3 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Turkiye Garanti may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Commercial International and Turkiye Garanti

The main advantage of trading using opposite Commercial International and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International 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 Commercial International Bank 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.