Correlation Between Sanica Isi and Akbank TAS

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

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

Diversification Opportunities for Sanica Isi and Akbank TAS

-0.12

Correlation Coefficient

Sanica Isi  Akbank TAS

Good diversification

The 3 months correlation between Sanica and Akbank is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sanica Isi Sanayi and Akbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akbank TAS and Sanica Isi 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 Sanica Isi Sanayi are associated (or correlated) with Akbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akbank TAS has no effect on the direction of Sanica Isi i.e., Sanica Isi and Akbank TAS go up and down completely randomly.

Pair Corralation between Sanica Isi and Akbank TAS

Assuming the 90 days trading horizon Sanica Isi Sanayi is expected to under-perform the Akbank TAS. But the stock apears to be less risky and, when comparing its historical volatility, Sanica Isi Sanayi is 1.09 times less risky than Akbank TAS. The stock trades about -0.01 of its potential returns per unit of risk. The Akbank TAS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  6,680  in Akbank TAS on April 4, 2024 and sell it today you would lose (55.00) from holding Akbank TAS or give up 0.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Sanica Isi Sanayi  vs.  Akbank TAS

Sanica Isi Sanayi

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sanica Isi Sanayi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Sanica Isi is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Akbank TAS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank TAS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward-looking signals, Akbank TAS demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sanica Isi and Akbank TAS

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

The idea behind Sanica Isi Sanayi and Akbank 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.