Correlation Between PSB Holdings and Akbank Turk

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

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

Diversification Opportunities for PSB Holdings and Akbank Turk

0.05

Correlation Coefficient

PSB Holdings  Akbank Turk

Significant diversification

The 3 months correlation between PSB and Akbank is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding PSB Holdings and Akbank Turk Anonim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank Turk Anonim and PSB Holdings 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 PSB Holdings are associated (or correlated) with Akbank Turk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank Turk Anonim has no effect on the direction of PSB Holdings i.e., PSB Holdings and Akbank Turk go up and down completely randomly.

Pair Corralation between PSB Holdings and Akbank Turk

Given the investment horizon of 90 days PSB Holdings is expected to generate 5.65 times less return on investment than Akbank Turk. But when comparing it to its historical volatility, PSB Holdings is 1.6 times less risky than Akbank Turk. It trades about 0.02 of its potential returns per unit of risk. Akbank Turk Anonim is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  135.00  in Akbank Turk Anonim on October 27, 2024 and sell it today you would earn a total of  244.00  from holding Akbank Turk Anonim or generate 180.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	83.78%
Values	Daily Returns

PSB Holdings  vs.  Akbank Turk Anonim

PSB Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PSB Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, PSB Holdings is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Akbank Turk Anonim

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank Turk Anonim are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Akbank Turk showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PSB Holdings and Akbank Turk

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

The idea behind PSB Holdings and Akbank Turk Anonim 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.