Correlation Between Turcas Petrol and Turkiye Petrol

Can any of the company-specific risk be diversified away by investing in both Turcas Petrol 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 Turcas Petrol and Turkiye Petrol 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 Turkiye Petrol Rafinerileri, you can compare the effects of market volatilities on Turcas Petrol 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 Turcas Petrol with a short position of Turkiye Petrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turcas Petrol and Turkiye Petrol.

Diversification Opportunities for Turcas Petrol and Turkiye Petrol

0.36

Correlation Coefficient

Turcas Petrol  Turkiye Petrol

Weak diversification

The 3 months correlation between Turcas and Turkiye is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Turcas Petrol AS 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 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 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 Turcas Petrol i.e., Turcas Petrol and Turkiye Petrol go up and down completely randomly.

Pair Corralation between Turcas Petrol and Turkiye Petrol

Assuming the 90 days trading horizon Turcas Petrol AS is expected to generate 1.82 times more return on investment than Turkiye Petrol. However, Turcas Petrol is 1.82 times more volatile than Turkiye Petrol Rafinerileri. It trades about 0.39 of its potential returns per unit of risk. Turkiye Petrol Rafinerileri is currently generating about 0.02 per unit of risk. If you would invest  2,200  in Turcas Petrol AS on September 22, 2024 and sell it today you would earn a total of  440.00  from holding Turcas Petrol AS or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Turcas Petrol AS  vs.  Turkiye Petrol Rafinerileri

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.

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 Turcas Petrol and Turkiye Petrol

The main advantage of trading using opposite Turcas Petrol and Turkiye Petrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turcas Petrol 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 Turcas Petrol AS 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .