Correlation Between Solo Brands and Turkiye Garanti

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

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

Diversification Opportunities for Solo Brands and Turkiye Garanti

-0.37

Correlation Coefficient

Solo Brands  Turkiye Garanti

Very good diversification

The 3 months correlation between Solo and Turkiye is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Solo Brands 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 Solo Brands 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 Solo Brands 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 Solo Brands i.e., Solo Brands and Turkiye Garanti go up and down completely randomly.

Pair Corralation between Solo Brands and Turkiye Garanti

Considering the 90-day investment horizon Solo Brands is expected to under-perform the Turkiye Garanti. In addition to that, Solo Brands is 1.06 times more volatile than Turkiye Garanti Bankasi. It trades about -0.09 of its total potential returns per unit of risk. Turkiye Garanti Bankasi is currently generating about 0.1 per unit of volatility. If you would invest  151.00  in Turkiye Garanti Bankasi on January 20, 2024 and sell it today you would earn a total of  88.00  from holding Turkiye Garanti Bankasi or generate 58.28% return on investment over 90 days.

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

Solo Brands  vs.  Turkiye Garanti Bankasi

Solo Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solo Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Turkiye Garanti Bankasi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Garanti Bankasi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Turkiye Garanti showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Solo Brands and Turkiye Garanti

The main advantage of trading using opposite Solo Brands and Turkiye Garanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solo Brands 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 Solo Brands 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.