Correlation Between Eurobank Ergasias and Akbank Turk

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

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

Diversification Opportunities for Eurobank Ergasias and Akbank Turk

-0.16

Correlation Coefficient

Eurobank Ergasias  Akbank Turk

Good diversification

The 3 months correlation between Eurobank and Akbank is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services and Akbank Turk Anonim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank Turk Anonim and Eurobank Ergasias 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 Eurobank Ergasias Services are associated (or correlated) with Akbank Turk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank Turk Anonim has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and Akbank Turk go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and Akbank Turk

Assuming the 90 days horizon Eurobank Ergasias Services is expected to generate 0.66 times more return on investment than Akbank Turk. However, Eurobank Ergasias Services is 1.52 times less risky than Akbank Turk. It trades about 0.32 of its potential returns per unit of risk. Akbank Turk Anonim is currently generating about 0.02 per unit of risk. If you would invest  209.00  in Eurobank Ergasias Services on October 12, 2024 and sell it today you would earn a total of  29.00  from holding Eurobank Ergasias Services or generate 13.88% return on investment over 90 days.

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

Eurobank Ergasias Services  vs.  Akbank Turk Anonim

Eurobank Ergasias

Risk-Adjusted Performance

10 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Eurobank Ergasias may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Akbank Turk Anonim

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank Turk Anonim are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Akbank Turk showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eurobank Ergasias and Akbank Turk

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

The idea behind Eurobank Ergasias Services and Akbank Turk Anonim 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.