Correlation Between Turkiye Garanti and Hang Seng

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

Diversification Opportunities for Turkiye Garanti and Hang Seng

-0.18

Correlation Coefficient

Turkiye Garanti  Hang Seng

Good diversification

The 3 months correlation between Turkiye and Hang is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Hang Seng Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Seng Bank 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 Hang Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Seng Bank has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Hang Seng go up and down completely randomly.

Pair Corralation between Turkiye Garanti and Hang Seng

Assuming the 90 days horizon Turkiye Garanti Bankasi is expected to under-perform the Hang Seng. In addition to that, Turkiye Garanti is 1.95 times more volatile than Hang Seng Bank. It trades about -0.04 of its total potential returns per unit of risk. Hang Seng Bank is currently generating about 0.14 per unit of volatility. If you would invest  1,174  in Hang Seng Bank on December 29, 2024 and sell it today you would earn a total of  180.00  from holding Hang Seng Bank or generate 15.33% 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.  Hang Seng Bank

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.

Hang Seng Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hang Seng Bank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hang Seng showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Garanti and Hang Seng

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

The idea behind Turkiye Garanti Bankasi and Hang Seng Bank 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.