Correlation Between Turkiye Kalkinma and Akbank TAS

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

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

Diversification Opportunities for Turkiye Kalkinma and Akbank TAS

0.43

Correlation Coefficient

Turkiye Kalkinma  Akbank TAS

Very weak diversification

The 3 months correlation between Turkiye and Akbank is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Kalkinma Bankasi and Akbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank TAS and Turkiye Kalkinma 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 Kalkinma Bankasi are associated (or correlated) with Akbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank TAS has no effect on the direction of Turkiye Kalkinma i.e., Turkiye Kalkinma and Akbank TAS go up and down completely randomly.

Pair Corralation between Turkiye Kalkinma and Akbank TAS

Assuming the 90 days trading horizon Turkiye Kalkinma Bankasi is expected to generate 1.59 times more return on investment than Akbank TAS. However, Turkiye Kalkinma is 1.59 times more volatile than Akbank TAS. It trades about 0.08 of its potential returns per unit of risk. Akbank TAS is currently generating about 0.11 per unit of risk. If you would invest  624.00  in Turkiye Kalkinma Bankasi on September 12, 2024 and sell it today you would earn a total of  846.00  from holding Turkiye Kalkinma Bankasi or generate 135.58% return on investment over 90 days.

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

Turkiye Kalkinma Bankasi  vs.  Akbank TAS

Turkiye Kalkinma Bankasi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turkiye Kalkinma Bankasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Akbank TAS

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank TAS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Akbank TAS demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Kalkinma and Akbank TAS

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

The idea behind Turkiye Kalkinma Bankasi and Akbank TAS 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.