Correlation Between Tele2 AB and Turkiye Garanti

Can any of the company-specific risk be diversified away by investing in both Tele2 AB and Turkiye Garanti 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 Tele2 AB and Turkiye Garanti into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tele2 AB and Turkiye Garanti Bankasi, you can compare the effects of market volatilities on Tele2 AB and Turkiye Garanti 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 Tele2 AB with a short position of Turkiye Garanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tele2 AB and Turkiye Garanti.

Diversification Opportunities for Tele2 AB and Turkiye Garanti

0.14

Correlation Coefficient

Tele2 AB  Turkiye Garanti

Average diversification

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

Pair Corralation between Tele2 AB and Turkiye Garanti

Assuming the 90 days horizon Tele2 AB is expected to under-perform the Turkiye Garanti. But the pink sheet apears to be less risky and, when comparing its historical volatility, Tele2 AB is 1.47 times less risky than Turkiye Garanti. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Turkiye Garanti Bankasi is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  323.00  in Turkiye Garanti Bankasi on September 14, 2024 and sell it today you would earn a total of  37.00  from holding Turkiye Garanti Bankasi or generate 11.46% return on investment over 90 days.

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

Tele2 AB  vs.  Turkiye Garanti Bankasi

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.

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.

Pair Trading with Tele2 AB and Turkiye Garanti

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

The idea behind Tele2 AB and Turkiye Garanti Bankasi 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.