Correlation Between Konya Cimento and Turkiye Petrol

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

By analyzing existing cross correlation between Konya Cimento Sanayi and Turkiye Petrol Rafinerileri, you can compare the effects of market volatilities on Konya Cimento and Turkiye Petrol 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 Konya Cimento with a short position of Turkiye Petrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konya Cimento and Turkiye Petrol.

Diversification Opportunities for Konya Cimento and Turkiye Petrol

0.15

Correlation Coefficient

Konya Cimento  Turkiye Petrol

Average diversification

The 3 months correlation between Konya and Turkiye is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Konya Cimento Sanayi and Turkiye Petrol Rafinerileri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Petrol Rafin and Konya Cimento 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 Konya Cimento Sanayi are associated (or correlated) with Turkiye Petrol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Petrol Rafin has no effect on the direction of Konya Cimento i.e., Konya Cimento and Turkiye Petrol go up and down completely randomly.

Pair Corralation between Konya Cimento and Turkiye Petrol

Assuming the 90 days trading horizon Konya Cimento Sanayi is expected to generate 2.03 times more return on investment than Turkiye Petrol. However, Konya Cimento is 2.03 times more volatile than Turkiye Petrol Rafinerileri. It trades about 0.04 of its potential returns per unit of risk. Turkiye Petrol Rafinerileri is currently generating about -0.08 per unit of risk. If you would invest  672,250  in Konya Cimento Sanayi on September 23, 2024 and sell it today you would earn a total of  28,750  from holding Konya Cimento Sanayi or generate 4.28% return on investment over 90 days.

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

Konya Cimento Sanayi  vs.  Turkiye Petrol Rafinerileri

Konya Cimento Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Konya Cimento Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Konya Cimento may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Turkiye Petrol Rafin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turkiye Petrol Rafinerileri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Konya Cimento and Turkiye Petrol

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

The idea behind Konya Cimento Sanayi and Turkiye Petrol Rafinerileri 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.