Correlation Between Turkiye Garanti and Turk Prysmian

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

Diversification Opportunities for Turkiye Garanti and Turk Prysmian

-0.05

Correlation Coefficient

Turkiye Garanti  Turk Prysmian

Good diversification

The 3 months correlation between Turkiye and Turk is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Turk Prysmian Kablo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turk Prysmian Kablo 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 Turk Prysmian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turk Prysmian Kablo has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Turk Prysmian go up and down completely randomly.

Pair Corralation between Turkiye Garanti and Turk Prysmian

Assuming the 90 days trading horizon Turkiye Garanti Bankasi is expected to generate 1.29 times more return on investment than Turk Prysmian. However, Turkiye Garanti is 1.29 times more volatile than Turk Prysmian Kablo. It trades about -0.08 of its potential returns per unit of risk. Turk Prysmian Kablo is currently generating about -0.11 per unit of risk. If you would invest  12,540  in Turkiye Garanti Bankasi on December 22, 2024 and sell it today you would lose (1,820) from holding Turkiye Garanti Bankasi or give up 14.51% of portfolio value over 90 days.

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

Turkiye Garanti Bankasi  vs.  Turk Prysmian Kablo

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 inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Turk Prysmian Kablo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turk Prysmian Kablo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Turkiye Garanti and Turk Prysmian

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

The idea behind Turkiye Garanti Bankasi and Turk Prysmian Kablo 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.