Correlation Between Turkiye Garanti and HMN Financial

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

Diversification Opportunities for Turkiye Garanti and HMN Financial

0.37

Correlation Coefficient

Turkiye Garanti  HMN Financial

Weak diversification

The 3 months correlation between Turkiye and HMN is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and HMN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMN Financial 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 HMN Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMN Financial has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and HMN Financial go up and down completely randomly.

Pair Corralation between Turkiye Garanti and HMN Financial

Assuming the 90 days horizon Turkiye Garanti Bankasi is expected to generate 2.06 times more return on investment than HMN Financial. However, Turkiye Garanti is 2.06 times more volatile than HMN Financial. It trades about 0.08 of its potential returns per unit of risk. HMN Financial is currently generating about 0.04 per unit of risk. If you would invest  105.00  in Turkiye Garanti Bankasi on October 3, 2024 and sell it today you would earn a total of  250.00  from holding Turkiye Garanti Bankasi or generate 238.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.22%
Values	Daily Returns

Turkiye Garanti Bankasi  vs.  HMN Financial

Turkiye Garanti Bankasi

Risk-Adjusted Performance

4 of 100

Weak

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 February 2025.

HMN Financial

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days HMN Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady basic indicators, HMN Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Garanti and HMN Financial

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

The idea behind Turkiye Garanti Bankasi and HMN Financial 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.