Correlation Between Turkiye Petrol and BIM Birlesik

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

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

Diversification Opportunities for Turkiye Petrol and BIM Birlesik

0.7

Correlation Coefficient

Turkiye Petrol  BIM Birlesik

Poor diversification

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

Pair Corralation between Turkiye Petrol and BIM Birlesik

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to generate 0.51 times more return on investment than BIM Birlesik. However, Turkiye Petrol Rafinerileri is 1.97 times less risky than BIM Birlesik. It trades about 0.0 of its potential returns per unit of risk. BIM Birlesik Magazalar is currently generating about -0.02 per unit of risk. If you would invest  15,192  in Turkiye Petrol Rafinerileri on September 14, 2024 and sell it today you would lose (72.00) from holding Turkiye Petrol Rafinerileri or give up 0.47% of portfolio value over 90 days.

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

Turkiye Petrol Rafinerileri  vs.  BIM Birlesik Magazalar

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 fairly strong forward indicators, Turkiye Petrol is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

BIM Birlesik Magazalar

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Turkiye Petrol and BIM Birlesik

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

The idea behind Turkiye Petrol Rafinerileri and BIM Birlesik Magazalar 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.