Correlation Between Global Yatirim and ICBC Turkey

Can any of the company-specific risk be diversified away by investing in both Global Yatirim and ICBC Turkey 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 Global Yatirim and ICBC Turkey into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Yatirim Holding and ICBC Turkey Bank, you can compare the effects of market volatilities on Global Yatirim and ICBC Turkey 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 Global Yatirim with a short position of ICBC Turkey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Yatirim and ICBC Turkey.

Diversification Opportunities for Global Yatirim and ICBC Turkey

0.32

Correlation Coefficient

Global Yatirim  ICBC Turkey

Weak diversification

The 3 months correlation between Global and ICBC is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Global Yatirim Holding and ICBC Turkey Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICBC Turkey Bank and Global Yatirim 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 Global Yatirim Holding are associated (or correlated) with ICBC Turkey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICBC Turkey Bank has no effect on the direction of Global Yatirim i.e., Global Yatirim and ICBC Turkey go up and down completely randomly.

Pair Corralation between Global Yatirim and ICBC Turkey

Assuming the 90 days trading horizon Global Yatirim Holding is expected to generate 1.28 times more return on investment than ICBC Turkey. However, Global Yatirim is 1.28 times more volatile than ICBC Turkey Bank. It trades about 0.13 of its potential returns per unit of risk. ICBC Turkey Bank is currently generating about -0.07 per unit of risk. If you would invest  560.00  in Global Yatirim Holding on December 22, 2024 and sell it today you would earn a total of  147.00  from holding Global Yatirim Holding or generate 26.25% return on investment over 90 days.

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

Global Yatirim Holding  vs.  ICBC Turkey Bank

Global Yatirim Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Yatirim Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Global Yatirim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ICBC Turkey Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICBC Turkey Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Global Yatirim and ICBC Turkey

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

The idea behind Global Yatirim Holding and ICBC Turkey Bank 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.