Correlation Between Hang Seng and Turkiye Garanti

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

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

Diversification Opportunities for Hang Seng and Turkiye Garanti

-0.18

Correlation Coefficient

Hang Seng  Turkiye Garanti

Good diversification

The 3 months correlation between Hang and Turkiye is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hang Seng Bank and Turkiye Garanti Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Garanti Bankasi and Hang Seng 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 Hang Seng Bank are associated (or correlated) with Turkiye Garanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Garanti Bankasi has no effect on the direction of Hang Seng i.e., Hang Seng and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Hang Seng and Turkiye Garanti

Assuming the 90 days horizon Hang Seng Bank is expected to generate 0.51 times more return on investment than Turkiye Garanti. However, Hang Seng Bank is 1.95 times less risky than Turkiye Garanti. It trades about 0.14 of its potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about -0.04 per unit of risk. If you would invest  1,174  in Hang Seng Bank on December 29, 2024 and sell it today you would earn a total of  180.00  from holding Hang Seng Bank or generate 15.33% return on investment over 90 days.

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

Hang Seng Bank  vs.  Turkiye Garanti Bankasi

Hang Seng Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hang Seng Bank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hang Seng showed solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Hang Seng and Turkiye Garanti

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

The idea behind Hang Seng Bank and Turkiye Garanti Bankasi 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.