Correlation Between Desa Deri and Turkiye Garanti

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

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

Diversification Opportunities for Desa Deri and Turkiye Garanti

0.24

Correlation Coefficient

Desa Deri  Turkiye Garanti

Modest diversification

The 3 months correlation between Desa and Turkiye is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Desa Deri Sanayi 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 Desa Deri 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 Desa Deri Sanayi 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 Desa Deri i.e., Desa Deri and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Desa Deri and Turkiye Garanti

Assuming the 90 days trading horizon Desa Deri Sanayi is expected to under-perform the Turkiye Garanti. But the stock apears to be less risky and, when comparing its historical volatility, Desa Deri Sanayi is 1.24 times less risky than Turkiye Garanti. The stock trades about -0.16 of its potential returns per unit of risk. The Turkiye Garanti Bankasi is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  12,620  in Turkiye Garanti Bankasi on December 28, 2024 and sell it today you would lose (310.00) from holding Turkiye Garanti Bankasi or give up 2.46% of portfolio value over 90 days.

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

Desa Deri Sanayi  vs.  Turkiye Garanti Bankasi

Desa Deri Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Desa Deri Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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. Despite fairly strong forward indicators, Turkiye Garanti is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Desa Deri and Turkiye Garanti

The main advantage of trading using opposite Desa Deri and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desa Deri 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 Desa Deri Sanayi 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.