Correlation Between Makina Takim and Turkiye Garanti

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

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

Diversification Opportunities for Makina Takim and Turkiye Garanti

0.75

Correlation Coefficient

Makina Takim  Turkiye Garanti

Poor diversification

The 3 months correlation between Makina and Turkiye is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Makina Takim Endustrisi 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 Makina Takim 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 Makina Takim Endustrisi 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 Makina Takim i.e., Makina Takim and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Makina Takim and Turkiye Garanti

Assuming the 90 days trading horizon Makina Takim is expected to generate 2.45 times less return on investment than Turkiye Garanti. In addition to that, Makina Takim is 1.45 times more volatile than Turkiye Garanti Bankasi. It trades about 0.04 of its total potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about 0.15 per unit of volatility. If you would invest  4,698  in Turkiye Garanti Bankasi on September 21, 2024 and sell it today you would earn a total of  7,842  from holding Turkiye Garanti Bankasi or generate 166.92% return on investment over 90 days.

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

Makina Takim Endustrisi  vs.  Turkiye Garanti Bankasi

Makina Takim Endustrisi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Turkiye Garanti Bankasi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turkiye Garanti is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Makina Takim and Turkiye Garanti

The main advantage of trading using opposite Makina Takim and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makina Takim 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 Makina Takim Endustrisi 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.