Correlation Between Turkiye Garanti and Harbor Bankshares

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

Diversification Opportunities for Turkiye Garanti and Harbor Bankshares

-0.07

Correlation Coefficient

Turkiye Garanti  Harbor Bankshares

Good diversification

The 3 months correlation between Turkiye and Harbor is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Bankshares 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 Harbor Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Bankshares has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Harbor Bankshares go up and down completely randomly.

Pair Corralation between Turkiye Garanti and Harbor Bankshares

Assuming the 90 days horizon Turkiye Garanti Bankasi is expected to under-perform the Harbor Bankshares. But the otc stock apears to be less risky and, when comparing its historical volatility, Turkiye Garanti Bankasi is 1.24 times less risky than Harbor Bankshares. The otc stock trades about -0.04 of its potential returns per unit of risk. The Harbor Bankshares is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,310  in Harbor Bankshares on December 29, 2024 and sell it today you would earn a total of  490.00  from holding Harbor Bankshares or generate 37.4% 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.  Harbor Bankshares

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.

Harbor Bankshares

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Bankshares are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Harbor Bankshares disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Garanti and Harbor Bankshares

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

The idea behind Turkiye Garanti Bankasi and Harbor Bankshares 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.