Correlation Between Akbank TAS and Vakko Tekstil

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

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

Diversification Opportunities for Akbank TAS and Vakko Tekstil

0.77

Correlation Coefficient

Akbank TAS  Vakko Tekstil

Poor diversification

The 3 months correlation between Akbank and Vakko is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Akbank TAS and Vakko Tekstil ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vakko Tekstil ve and Akbank TAS 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 Akbank TAS are associated (or correlated) with Vakko Tekstil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vakko Tekstil ve has no effect on the direction of Akbank TAS i.e., Akbank TAS and Vakko Tekstil go up and down completely randomly.

Pair Corralation between Akbank TAS and Vakko Tekstil

Assuming the 90 days trading horizon Akbank TAS is expected to generate 1.11 times more return on investment than Vakko Tekstil. However, Akbank TAS is 1.11 times more volatile than Vakko Tekstil ve. It trades about 0.28 of its potential returns per unit of risk. Vakko Tekstil ve is currently generating about 0.18 per unit of risk. If you would invest  3,925  in Akbank TAS on March 7, 2024 and sell it today you would earn a total of  2,425  from holding Akbank TAS or generate 61.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Akbank TAS  vs.  Vakko Tekstil ve

Akbank TAS

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank TAS are ranked lower than 21 (%) 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.

Vakko Tekstil ve

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vakko Tekstil ve are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Vakko Tekstil demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akbank TAS and Vakko Tekstil

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

The idea behind Akbank TAS and Vakko Tekstil ve 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.