Correlation Between Galata Wind and Sekerbank TAS

Can any of the company-specific risk be diversified away by investing in both Galata Wind and Sekerbank TAS 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 Galata Wind and Sekerbank TAS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Galata Wind Enerji and Sekerbank TAS, you can compare the effects of market volatilities on Galata Wind and Sekerbank TAS 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 Galata Wind with a short position of Sekerbank TAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galata Wind and Sekerbank TAS.

Diversification Opportunities for Galata Wind and Sekerbank TAS

-0.43

Correlation Coefficient

Galata Wind  Sekerbank TAS

Very good diversification

The 3 months correlation between Galata and Sekerbank is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Galata Wind Enerji and Sekerbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekerbank TAS and Galata Wind 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 Galata Wind Enerji are associated (or correlated) with Sekerbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekerbank TAS has no effect on the direction of Galata Wind i.e., Galata Wind and Sekerbank TAS go up and down completely randomly.

Pair Corralation between Galata Wind and Sekerbank TAS

Assuming the 90 days trading horizon Galata Wind Enerji is expected to under-perform the Sekerbank TAS. But the stock apears to be less risky and, when comparing its historical volatility, Galata Wind Enerji is 1.46 times less risky than Sekerbank TAS. The stock trades about -0.51 of its potential returns per unit of risk. The Sekerbank TAS is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  434.00  in Sekerbank TAS on July 3, 2024 and sell it today you would lose (28.00) from holding Sekerbank TAS or give up 6.45% of portfolio value over 90 days.

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

Galata Wind Enerji  vs.  Sekerbank TAS

Galata Wind Enerji

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galata Wind Enerji has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in November 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Sekerbank TAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sekerbank TAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Sekerbank TAS is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Galata Wind and Sekerbank TAS

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

The idea behind Galata Wind Enerji and Sekerbank TAS 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.