Correlation Between Turkiye Petrol and Kordsa Global

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

Diversification Opportunities for Turkiye Petrol and Kordsa Global

0.73

Correlation Coefficient

Turkiye Petrol  Kordsa Global

Poor diversification

The 3 months correlation between Turkiye and Kordsa is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Kordsa Global Endustriyel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kordsa Global Endustriyel 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 Kordsa Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kordsa Global Endustriyel has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Kordsa Global go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Kordsa Global

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to generate 0.75 times more return on investment than Kordsa Global. However, Turkiye Petrol Rafinerileri is 1.33 times less risky than Kordsa Global. It trades about -0.08 of its potential returns per unit of risk. Kordsa Global Endustriyel is currently generating about -0.08 per unit of risk. If you would invest  18,223  in Turkiye Petrol Rafinerileri on September 24, 2024 and sell it today you would lose (3,673) from holding Turkiye Petrol Rafinerileri or give up 20.16% 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.  Kordsa Global Endustriyel

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.

Kordsa Global Endustriyel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kordsa Global Endustriyel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Kordsa Global 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 Kordsa Global

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

The idea behind Turkiye Petrol Rafinerileri and Kordsa Global Endustriyel 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.