Correlation Between Trabzon Liman and Akbank TAS

Can any of the company-specific risk be diversified away by investing in both Trabzon Liman and Akbank TAS 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 Trabzon Liman and Akbank TAS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trabzon Liman Isletmeciligi and Akbank TAS, you can compare the effects of market volatilities on Trabzon Liman and Akbank TAS 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 Trabzon Liman with a short position of Akbank TAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trabzon Liman and Akbank TAS.

Diversification Opportunities for Trabzon Liman and Akbank TAS

0.28

Correlation Coefficient

Trabzon Liman  Akbank TAS

Modest diversification

The 3 months correlation between Trabzon and Akbank is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Trabzon Liman Isletmeciligi and Akbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank TAS and Trabzon Liman 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 Trabzon Liman Isletmeciligi are associated (or correlated) with Akbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank TAS has no effect on the direction of Trabzon Liman i.e., Trabzon Liman and Akbank TAS go up and down completely randomly.

Pair Corralation between Trabzon Liman and Akbank TAS

Assuming the 90 days trading horizon Trabzon Liman Isletmeciligi is expected to under-perform the Akbank TAS. But the stock apears to be less risky and, when comparing its historical volatility, Trabzon Liman Isletmeciligi is 1.19 times less risky than Akbank TAS. The stock trades about -0.08 of its potential returns per unit of risk. The Akbank TAS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  6,025  in Akbank TAS on December 24, 2024 and sell it today you would lose (650.00) from holding Akbank TAS or give up 10.79% of portfolio value over 90 days.

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

Trabzon Liman Isletmeciligi  vs.  Akbank TAS

Trabzon Liman Isletm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trabzon Liman Isletmeciligi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Akbank TAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Akbank TAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Trabzon Liman and Akbank TAS

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

The idea behind Trabzon Liman Isletmeciligi and Akbank TAS 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.