Correlation Between Turkiye Petrol and Kent Gida

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

Diversification Opportunities for Turkiye Petrol and Kent Gida

0.5

Correlation Coefficient

Turkiye Petrol  Kent Gida

Very weak diversification

The 3 months correlation between Turkiye and Kent is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Kent Gida Maddeleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kent Gida Maddeleri 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 Kent Gida. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kent Gida Maddeleri has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Kent Gida go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Kent Gida

Assuming the 90 days trading horizon Turkiye Petrol is expected to generate 29.69 times less return on investment than Kent Gida. But when comparing it to its historical volatility, Turkiye Petrol Rafinerileri is 2.51 times less risky than Kent Gida. It trades about 0.0 of its potential returns per unit of risk. Kent Gida Maddeleri is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  95,550  in Kent Gida Maddeleri on September 13, 2024 and sell it today you would earn a total of  8,950  from holding Kent Gida Maddeleri or generate 9.37% return on investment over 90 days.

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

Turkiye Petrol Rafinerileri  vs.  Kent Gida Maddeleri

Turkiye Petrol Rafin

Risk-Adjusted Performance

0 of 100

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

Kent Gida Maddeleri

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kent Gida Maddeleri are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Kent Gida may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Turkiye Petrol and Kent Gida

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

The idea behind Turkiye Petrol Rafinerileri and Kent Gida Maddeleri 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.