Correlation Between Turkiye Garanti and Euro Menkul

Can any of the company-specific risk be diversified away by investing in both Turkiye Garanti and Euro Menkul 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 Euro Menkul 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 Euro Menkul Kiymet, you can compare the effects of market volatilities on Turkiye Garanti and Euro Menkul 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 Euro Menkul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Garanti and Euro Menkul.

Diversification Opportunities for Turkiye Garanti and Euro Menkul

0.47

Correlation Coefficient

Turkiye Garanti  Euro Menkul

Very weak diversification

The 3 months correlation between Turkiye and Euro is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Euro Menkul Kiymet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Menkul Kiymet 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 Euro Menkul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Menkul Kiymet has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Euro Menkul go up and down completely randomly.

Pair Corralation between Turkiye Garanti and Euro Menkul

Assuming the 90 days trading horizon Turkiye Garanti Bankasi is expected to generate 0.69 times more return on investment than Euro Menkul. However, Turkiye Garanti Bankasi is 1.45 times less risky than Euro Menkul. It trades about 0.14 of its potential returns per unit of risk. Euro Menkul Kiymet is currently generating about 0.08 per unit of risk. If you would invest  2,147  in Turkiye Garanti Bankasi on October 4, 2024 and sell it today you would earn a total of  10,733  from holding Turkiye Garanti Bankasi or generate 499.91% return on investment over 90 days.

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

Turkiye Garanti Bankasi  vs.  Euro Menkul Kiymet

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 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Euro Menkul Kiymet

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Euro Menkul Kiymet are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Euro Menkul unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Garanti and Euro Menkul

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

The idea behind Turkiye Garanti Bankasi and Euro Menkul Kiymet 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..