Correlation Between HV Bancorp and Turkiye Garanti

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

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

Diversification Opportunities for HV Bancorp and Turkiye Garanti

0.0

Correlation Coefficient

HV Bancorp  Turkiye Garanti

Pay attention - limited upside

The 3 months correlation between HVBC and Turkiye is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HV Bancorp 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 HV Bancorp 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 HV Bancorp 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 HV Bancorp i.e., HV Bancorp and Turkiye Garanti go up and down completely randomly.

Pair Corralation between HV Bancorp and Turkiye Garanti

Given the investment horizon of 90 days HV Bancorp is expected to generate 3.04 times less return on investment than Turkiye Garanti. But when comparing it to its historical volatility, HV Bancorp is 1.96 times less risky than Turkiye Garanti. It trades about 0.05 of its potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Turkiye Garanti Bankasi on October 3, 2024 and sell it today you would earn a total of  250.00  from holding Turkiye Garanti Bankasi or generate 238.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	18.97%
Values	Daily Returns

HV Bancorp  vs.  Turkiye Garanti Bankasi

HV Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HV Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, HV Bancorp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Turkiye Garanti Bankasi

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Turkiye Garanti may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with HV Bancorp and Turkiye Garanti

The main advantage of trading using opposite HV Bancorp and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HV Bancorp 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 HV Bancorp 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.