Correlation Between Turkiye Garanti and ENKA Insaat

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

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

Diversification Opportunities for Turkiye Garanti and ENKA Insaat

0.25

Correlation Coefficient

Turkiye Garanti  ENKA Insaat

Modest diversification

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

Pair Corralation between Turkiye Garanti and ENKA Insaat

Assuming the 90 days trading horizon Turkiye Garanti Bankasi is expected to generate 1.13 times more return on investment than ENKA Insaat. However, Turkiye Garanti is 1.13 times more volatile than ENKA Insaat ve. It trades about 0.12 of its potential returns per unit of risk. ENKA Insaat ve is currently generating about 0.05 per unit of risk. If you would invest  2,692  in Turkiye Garanti Bankasi on September 19, 2024 and sell it today you would earn a total of  10,358  from holding Turkiye Garanti Bankasi or generate 384.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.39%
Values	Daily Returns

Turkiye Garanti Bankasi  vs.  ENKA Insaat ve

Turkiye Garanti Bankasi

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkiye Garanti demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ENKA Insaat ve

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ENKA Insaat ve are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, ENKA Insaat demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Garanti and ENKA Insaat

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

The idea behind Turkiye Garanti Bankasi and ENKA Insaat ve 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.

Check out your portfolio center.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.