Correlation Between Turkiye Garanti and First Community

Can any of the company-specific risk be diversified away by investing in both Turkiye Garanti and First Community 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 First Community 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 First Community, you can compare the effects of market volatilities on Turkiye Garanti and First Community 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 First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Garanti and First Community.

Diversification Opportunities for Turkiye Garanti and First Community

-0.11

Correlation Coefficient

Turkiye Garanti  First Community

Good diversification

The 3 months correlation between Turkiye and First is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community 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 First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and First Community go up and down completely randomly.

Pair Corralation between Turkiye Garanti and First Community

If you would invest  330.00  in Turkiye Garanti Bankasi on September 2, 2024 and sell it today you would earn a total of  25.00  from holding Turkiye Garanti Bankasi or generate 7.58% 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.  First Community

Turkiye Garanti Bankasi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Turkiye Garanti may actually be approaching a critical reversion point that can send shares even higher in January 2025.

First Community

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Community has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, First Community is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Turkiye Garanti and First Community

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

The idea behind Turkiye Garanti Bankasi and First Community 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.