Correlation Between Turcas Petrol and Ege Profil

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

By analyzing existing cross correlation between Turcas Petrol AS and Ege Profil Ticaret, you can compare the effects of market volatilities on Turcas Petrol and Ege Profil 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 Turcas Petrol with a short position of Ege Profil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turcas Petrol and Ege Profil.

Diversification Opportunities for Turcas Petrol and Ege Profil

0.7

Correlation Coefficient

Turcas Petrol  Ege Profil

Poor diversification

The 3 months correlation between Turcas and Ege is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Turcas Petrol AS and Ege Profil Ticaret in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Profil Ticaret and Turcas Petrol 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 Turcas Petrol AS are associated (or correlated) with Ege Profil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Profil Ticaret has no effect on the direction of Turcas Petrol i.e., Turcas Petrol and Ege Profil go up and down completely randomly.

Pair Corralation between Turcas Petrol and Ege Profil

Assuming the 90 days trading horizon Turcas Petrol AS is expected to generate 1.33 times more return on investment than Ege Profil. However, Turcas Petrol is 1.33 times more volatile than Ege Profil Ticaret. It trades about 0.0 of its potential returns per unit of risk. Ege Profil Ticaret is currently generating about -0.07 per unit of risk. If you would invest  2,762  in Turcas Petrol AS on September 24, 2024 and sell it today you would lose (122.00) from holding Turcas Petrol AS or give up 4.42% of portfolio value over 90 days.

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

Turcas Petrol AS  vs.  Ege Profil Ticaret

Turcas Petrol AS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turcas Petrol AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turcas Petrol may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ege Profil Ticaret

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Ege Profil Ticaret has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Ege Profil is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Turcas Petrol and Ege Profil

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

The idea behind Turcas Petrol AS and Ege Profil Ticaret 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.