Correlation Between Vakif Finansal and Turkiye Garanti

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

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

Diversification Opportunities for Vakif Finansal and Turkiye Garanti

0.57

Correlation Coefficient

Vakif Finansal  Turkiye Garanti

Very weak diversification

The 3 months correlation between Vakif and Turkiye is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vakif Finansal Kiralama 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 Vakif Finansal 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 Vakif Finansal Kiralama 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 Vakif Finansal i.e., Vakif Finansal and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Vakif Finansal and Turkiye Garanti

Assuming the 90 days trading horizon Vakif Finansal Kiralama is expected to generate 5.6 times more return on investment than Turkiye Garanti. However, Vakif Finansal is 5.6 times more volatile than Turkiye Garanti Bankasi. It trades about 0.05 of its potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about 0.14 per unit of risk. If you would invest  81.00  in Vakif Finansal Kiralama on October 4, 2024 and sell it today you would earn a total of  111.00  from holding Vakif Finansal Kiralama or generate 137.04% return on investment over 90 days.

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

Vakif Finansal Kiralama  vs.  Turkiye Garanti Bankasi

Vakif Finansal Kiralama

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vakif Finansal Kiralama are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Vakif Finansal demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Turkiye Garanti Bankasi

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Turkiye Garanti may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Vakif Finansal and Turkiye Garanti

The main advantage of trading using opposite Vakif Finansal and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vakif Finansal 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 Vakif Finansal Kiralama 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.