Correlation Between Yapi Ve and Turkiye Garanti

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

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

Diversification Opportunities for Yapi Ve and Turkiye Garanti

0.94

Correlation Coefficient

Yapi Ve  Turkiye Garanti

Almost no diversification

The 3 months correlation between Yapi and Turkiye is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Yapi ve Kredi 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 Yapi Ve 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 Yapi ve Kredi 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 Yapi Ve i.e., Yapi Ve and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Yapi Ve and Turkiye Garanti

Assuming the 90 days trading horizon Yapi Ve is expected to generate 1.05 times less return on investment than Turkiye Garanti. In addition to that, Yapi Ve is 1.16 times more volatile than Turkiye Garanti Bankasi. It trades about 0.21 of its total potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about 0.26 per unit of volatility. If you would invest  6,303  in Turkiye Garanti Bankasi on February 16, 2024 and sell it today you would earn a total of  2,697  from holding Turkiye Garanti Bankasi or generate 42.79% return on investment over 90 days.

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

Yapi ve Kredi  vs.  Turkiye Garanti Bankasi

Yapi ve Kredi

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yapi ve Kredi are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward-looking signals, Yapi Ve demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Turkiye Garanti Bankasi

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Turkiye Garanti demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yapi Ve and Turkiye Garanti

The main advantage of trading using opposite Yapi Ve and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yapi Ve 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 Yapi ve Kredi 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.