Correlation Between Turkiye Garanti and Seyitler Kimya

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

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

Diversification Opportunities for Turkiye Garanti and Seyitler Kimya

0.84

Correlation Coefficient

Turkiye Garanti  Seyitler Kimya

Very poor diversification

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

Pair Corralation between Turkiye Garanti and Seyitler Kimya

Assuming the 90 days trading horizon Turkiye Garanti Bankasi is expected to generate 0.8 times more return on investment than Seyitler Kimya. However, Turkiye Garanti Bankasi is 1.26 times less risky than Seyitler Kimya. It trades about 0.13 of its potential returns per unit of risk. Seyitler Kimya Sanayi is currently generating about 0.07 per unit of risk. If you would invest  1,434  in Turkiye Garanti Bankasi on February 26, 2024 and sell it today you would earn a total of  8,491  from holding Turkiye Garanti Bankasi or generate 592.12% return on investment over 90 days.

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

Turkiye Garanti Bankasi  vs.  Seyitler Kimya Sanayi

Turkiye Garanti Bankasi

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 24 (%) 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.

Seyitler Kimya Sanayi

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seyitler Kimya Sanayi are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, Seyitler Kimya demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Garanti and Seyitler Kimya

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

The idea behind Turkiye Garanti Bankasi and Seyitler Kimya Sanayi 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.