Correlation Between Alarko Gayrimenkul and Turkiye Garanti

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

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

Diversification Opportunities for Alarko Gayrimenkul and Turkiye Garanti

-0.38

Correlation Coefficient

Alarko Gayrimenkul  Turkiye Garanti

Very good diversification

The 3 months correlation between Alarko and Turkiye is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alarko Gayrimenkul Yatirim 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 Alarko Gayrimenkul 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 Alarko Gayrimenkul Yatirim 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 Alarko Gayrimenkul i.e., Alarko Gayrimenkul and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Alarko Gayrimenkul and Turkiye Garanti

Assuming the 90 days trading horizon Alarko Gayrimenkul Yatirim is expected to under-perform the Turkiye Garanti. But the stock apears to be less risky and, when comparing its historical volatility, Alarko Gayrimenkul Yatirim is 1.14 times less risky than Turkiye Garanti. The stock trades about -0.09 of its potential returns per unit of risk. The Turkiye Garanti Bankasi is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  8,195  in Turkiye Garanti Bankasi on February 29, 2024 and sell it today you would earn a total of  1,825  from holding Turkiye Garanti Bankasi or generate 22.27% return on investment over 90 days.

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

Alarko Gayrimenkul Yatirim  vs.  Turkiye Garanti Bankasi

Alarko Gayrimenkul

Risk-Adjusted Performance

0 of 100

Very Weak

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

Turkiye Garanti Bankasi

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Turkiye Garanti demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alarko Gayrimenkul and Turkiye Garanti

The main advantage of trading using opposite Alarko Gayrimenkul and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alarko Gayrimenkul 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 Alarko Gayrimenkul Yatirim 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.