Correlation Between Eurobank Ergasias and Turkiye Garanti

Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias 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 Eurobank Ergasias and Turkiye Garanti 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 Turkiye Garanti Bankasi, you can compare the effects of market volatilities on Eurobank Ergasias 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 Eurobank Ergasias with a short position of Turkiye Garanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Turkiye Garanti.

Diversification Opportunities for Eurobank Ergasias and Turkiye Garanti

-0.11

Correlation Coefficient

Eurobank Ergasias  Turkiye Garanti

Good diversification

The 3 months correlation between Eurobank and Turkiye is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias Services 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 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 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 Eurobank Ergasias i.e., Eurobank Ergasias and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Eurobank Ergasias and Turkiye Garanti

Assuming the 90 days horizon Eurobank Ergasias Services is expected to generate 0.65 times more return on investment than Turkiye Garanti. However, Eurobank Ergasias Services is 1.55 times less risky than Turkiye Garanti. It trades about 0.09 of its potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about -0.04 per unit of risk. If you would invest  224.00  in Eurobank Ergasias Services on December 30, 2024 and sell it today you would earn a total of  22.00  from holding Eurobank Ergasias Services or generate 9.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.1%
Values	Daily Returns

Eurobank Ergasias Services  vs.  Turkiye Garanti Bankasi

Eurobank Ergasias

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Eurobank Ergasias may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Eurobank Ergasias and Turkiye Garanti

The main advantage of trading using opposite Eurobank Ergasias and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias 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 Eurobank Ergasias Services 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.