Correlation Between Turkiye Halk and Migros Ticaret

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

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

Diversification Opportunities for Turkiye Halk and Migros Ticaret

0.7

Correlation Coefficient

Turkiye Halk  Migros Ticaret

Poor diversification

The 3 months correlation between Turkiye and Migros is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Halk Bankasi and Migros Ticaret AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migros Ticaret AS and Turkiye Halk 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 Halk Bankasi are associated (or correlated) with Migros Ticaret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Migros Ticaret AS has no effect on the direction of Turkiye Halk i.e., Turkiye Halk and Migros Ticaret go up and down completely randomly.

Pair Corralation between Turkiye Halk and Migros Ticaret

Assuming the 90 days trading horizon Turkiye Halk Bankasi is expected to under-perform the Migros Ticaret. But the stock apears to be less risky and, when comparing its historical volatility, Turkiye Halk Bankasi is 1.11 times less risky than Migros Ticaret. The stock trades about -0.04 of its potential returns per unit of risk. The Migros Ticaret AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  49,161  in Migros Ticaret AS on September 23, 2024 and sell it today you would earn a total of  564.00  from holding Migros Ticaret AS or generate 1.15% return on investment over 90 days.

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

Turkiye Halk Bankasi  vs.  Migros Ticaret AS

Turkiye Halk Bankasi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turkiye Halk Bankasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Turkiye Halk is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Migros Ticaret AS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Migros Ticaret AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Migros Ticaret is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Turkiye Halk and Migros Ticaret

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

The idea behind Turkiye Halk Bankasi and Migros Ticaret AS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.