Correlation Between Turkiye Garanti and China Merchants
Can any of the company-specific risk be diversified away by investing in both Turkiye Garanti and China Merchants 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 Turkiye Garanti and China Merchants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turkiye Garanti Bankasi and China Merchants Bank, you can compare the effects of market volatilities on Turkiye Garanti and China Merchants 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 Turkiye Garanti with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Garanti and China Merchants.
Diversification Opportunities for Turkiye Garanti and China Merchants
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Turkiye and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Garanti Bankasi and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank and Turkiye Garanti 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 Turkiye Garanti Bankasi are associated (or correlated) with China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of Turkiye Garanti i.e., Turkiye Garanti and China Merchants go up and down completely randomly.
Pair Corralation between Turkiye Garanti and China Merchants
Assuming the 90 days horizon Turkiye Garanti Bankasi is expected to generate 1.37 times more return on investment than China Merchants. However, Turkiye Garanti is 1.37 times more volatile than China Merchants Bank. It trades about 0.26 of its potential returns per unit of risk. China Merchants Bank is currently generating about 0.21 per unit of risk. If you would invest 215.00 in Turkiye Garanti Bankasi on February 10, 2024 and sell it today you would earn a total of 60.00 from holding Turkiye Garanti Bankasi or generate 27.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Turkiye Garanti Bankasi vs. China Merchants Bank
Performance |
Timeline |
Turkiye Garanti Bankasi |
China Merchants Bank |
Turkiye Garanti and China Merchants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Turkiye Garanti and China Merchants
The main advantage of trading using opposite Turkiye Garanti and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Garanti position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.Turkiye Garanti vs. First Hawaiian | Turkiye Garanti vs. Central Pacific Financial | Turkiye Garanti vs. Territorial Bancorp | Turkiye Garanti vs. Comerica |
China Merchants vs. First Hawaiian | China Merchants vs. Central Pacific Financial | China Merchants vs. Territorial Bancorp | China Merchants vs. Comerica |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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