Correlation Between Turkiye Garanti and Koc Holdings

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

Diversification Opportunities for Turkiye Garanti and Koc Holdings

0.43

Correlation Coefficient

Turkiye Garanti  Koc Holdings

Very weak diversification

The 3 months correlation between Turkiye and Koc is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Koc Holdings AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koc Holdings AS 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 Koc Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koc Holdings AS has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Koc Holdings go up and down completely randomly.

Pair Corralation between Turkiye Garanti and Koc Holdings

Assuming the 90 days horizon Turkiye Garanti Bankasi is expected to generate 0.83 times more return on investment than Koc Holdings. However, Turkiye Garanti Bankasi is 1.2 times less risky than Koc Holdings. It trades about -0.04 of its potential returns per unit of risk. Koc Holdings AS is currently generating about -0.06 per unit of risk. If you would invest  360.00  in Turkiye Garanti Bankasi on December 28, 2024 and sell it today you would lose (42.00) from holding Turkiye Garanti Bankasi or give up 11.67% of portfolio value over 90 days.

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

Turkiye Garanti Bankasi  vs.  Koc Holdings AS

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.

Koc Holdings AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koc Holdings AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Turkiye Garanti and Koc Holdings

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

The idea behind Turkiye Garanti Bankasi and Koc Holdings AS 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.