Correlation Between Otokar Otomotiv and Turkiye Garanti

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

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

Diversification Opportunities for Otokar Otomotiv and Turkiye Garanti

0.46

Correlation Coefficient

Otokar Otomotiv  Turkiye Garanti

Very weak diversification

The 3 months correlation between Otokar and Turkiye is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Otokar Otomotiv ve 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 Otokar Otomotiv 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 Otokar Otomotiv ve 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 Otokar Otomotiv i.e., Otokar Otomotiv and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Otokar Otomotiv and Turkiye Garanti

Assuming the 90 days trading horizon Otokar Otomotiv ve is expected to under-perform the Turkiye Garanti. But the stock apears to be less risky and, when comparing its historical volatility, Otokar Otomotiv ve is 1.07 times less risky than Turkiye Garanti. The stock trades about -0.39 of its potential returns per unit of risk. The Turkiye Garanti Bankasi is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  13,330  in Turkiye Garanti Bankasi on October 26, 2024 and sell it today you would earn a total of  20.00  from holding Turkiye Garanti Bankasi or generate 0.15% return on investment over 90 days.

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

Otokar Otomotiv ve  vs.  Turkiye Garanti Bankasi

Otokar Otomotiv ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Otokar Otomotiv ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Otokar Otomotiv 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

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turkiye Garanti demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Otokar Otomotiv and Turkiye Garanti

The main advantage of trading using opposite Otokar Otomotiv and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otokar Otomotiv 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 Otokar Otomotiv ve 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.