Correlation Between Turkiye Garanti and Piraeus Bank

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

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

Diversification Opportunities for Turkiye Garanti and Piraeus Bank

-0.36

Correlation Coefficient

Turkiye Garanti  Piraeus Bank

Very good diversification

The 3 months correlation between Turkiye and Piraeus is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Piraeus Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Bank SA and Turkiye Garanti 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 Garanti Bankasi are associated (or correlated) with Piraeus Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Bank SA has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Piraeus Bank go up and down completely randomly.

Pair Corralation between Turkiye Garanti and Piraeus Bank

Assuming the 90 days horizon Turkiye Garanti Bankasi is expected to under-perform the Piraeus Bank. In addition to that, Turkiye Garanti is 1.16 times more volatile than Piraeus Bank SA. It trades about -0.04 of its total potential returns per unit of risk. Piraeus Bank SA is currently generating about 0.21 per unit of volatility. If you would invest  410.00  in Piraeus Bank SA on December 30, 2024 and sell it today you would earn a total of  172.00  from holding Piraeus Bank SA or generate 41.95% return on investment over 90 days.

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

Turkiye Garanti Bankasi  vs.  Piraeus Bank SA

Turkiye Garanti Bankasi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turkiye Garanti Bankasi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Piraeus Bank SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Piraeus Bank SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Piraeus Bank showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Garanti and Piraeus Bank

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

The idea behind Turkiye Garanti Bankasi and Piraeus Bank SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.