Correlation Between Turkiye Garanti and Tele2 AB

Can any of the company-specific risk be diversified away by investing in both Turkiye Garanti and Tele2 AB 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 Tele2 AB 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 Tele2 AB, you can compare the effects of market volatilities on Turkiye Garanti and Tele2 AB 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 Tele2 AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Garanti and Tele2 AB.

Diversification Opportunities for Turkiye Garanti and Tele2 AB

0.14

Correlation Coefficient

Turkiye Garanti  Tele2 AB

Average diversification

The 3 months correlation between Turkiye and Tele2 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and Tele2 AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tele2 AB 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 Tele2 AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tele2 AB has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and Tele2 AB go up and down completely randomly.

Pair Corralation between Turkiye Garanti and Tele2 AB

Assuming the 90 days horizon Turkiye Garanti Bankasi is expected to generate 1.07 times more return on investment than Tele2 AB. However, Turkiye Garanti is 1.07 times more volatile than Tele2 AB. It trades about 0.06 of its potential returns per unit of risk. Tele2 AB is currently generating about -0.04 per unit of risk. If you would invest  332.00  in Turkiye Garanti Bankasi on September 14, 2024 and sell it today you would earn a total of  28.00  from holding Turkiye Garanti Bankasi or generate 8.43% return on investment over 90 days.

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

Turkiye Garanti Bankasi  vs.  Tele2 AB

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.

Tele2 AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tele2 AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Turkiye Garanti and Tele2 AB

The main advantage of trading using opposite Turkiye Garanti and Tele2 AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Garanti position performs unexpectedly, Tele2 AB 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 Tele2 AB will offset losses from the drop in Tele2 AB's long position.

The idea behind Turkiye Garanti Bankasi and Tele2 AB 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.