Correlation Between Vakif Finansal and Galata Wind

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

Diversification Opportunities for Vakif Finansal and Galata Wind

0.84

Correlation Coefficient

Vakif Finansal  Galata Wind

Very poor diversification

The 3 months correlation between Vakif and Galata is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Vakif Finansal Kiralama and Galata Wind Enerji in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galata Wind Enerji 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 Galata Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galata Wind Enerji has no effect on the direction of Vakif Finansal i.e., Vakif Finansal and Galata Wind go up and down completely randomly.

Pair Corralation between Vakif Finansal and Galata Wind

Assuming the 90 days trading horizon Vakif Finansal is expected to generate 1.25 times less return on investment than Galata Wind. In addition to that, Vakif Finansal is 1.22 times more volatile than Galata Wind Enerji. It trades about 0.12 of its total potential returns per unit of risk. Galata Wind Enerji is currently generating about 0.18 per unit of volatility. If you would invest  2,406  in Galata Wind Enerji on October 7, 2024 and sell it today you would earn a total of  722.00  from holding Galata Wind Enerji or generate 30.01% return on investment over 90 days.

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

Vakif Finansal Kiralama  vs.  Galata Wind Enerji

Vakif Finansal Kiralama

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vakif Finansal Kiralama are ranked lower than 9 (%) 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.

Galata Wind Enerji

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Galata Wind Enerji are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Galata Wind demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vakif Finansal and Galata Wind

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

The idea behind Vakif Finansal Kiralama and Galata Wind Enerji 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.