Correlation Between Tumosan and Akbank TAS

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

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

Diversification Opportunities for Tumosan and Akbank TAS

0.41

Correlation Coefficient

Tumosan  Akbank TAS

Very weak diversification

The 3 months correlation between Tumosan and Akbank is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tumosan Motor ve and Akbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank TAS and Tumosan 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 Tumosan Motor ve 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 Tumosan i.e., Tumosan and Akbank TAS go up and down completely randomly.

Pair Corralation between Tumosan and Akbank TAS

Assuming the 90 days trading horizon Tumosan Motor ve is expected to under-perform the Akbank TAS. But the stock apears to be less risky and, when comparing its historical volatility, Tumosan Motor ve is 1.21 times less risky than Akbank TAS. The stock trades about -0.03 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  6,060  in Akbank TAS on September 5, 2024 and sell it today you would earn a total of  280.00  from holding Akbank TAS or generate 4.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Tumosan Motor ve  vs.  Akbank TAS

Tumosan Motor ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tumosan Motor ve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tumosan is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Akbank TAS

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank TAS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Akbank TAS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tumosan and Akbank TAS

The main advantage of trading using opposite Tumosan and Akbank TAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tumosan 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 Tumosan Motor ve 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.