Correlation Between Turkiye Petrol and Migros Ticaret

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

Diversification Opportunities for Turkiye Petrol and Migros Ticaret

0.39

Correlation Coefficient

Turkiye Petrol  Migros Ticaret

Weak diversification

The 3 months correlation between Turkiye and Migros is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Migros Ticaret AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migros Ticaret AS 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 Migros Ticaret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Migros Ticaret AS has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Migros Ticaret go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Migros Ticaret

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to under-perform the Migros Ticaret. But the stock apears to be less risky and, when comparing its historical volatility, Turkiye Petrol Rafinerileri is 1.69 times less risky than Migros Ticaret. The stock trades about -0.08 of its potential returns per unit of risk. The Migros Ticaret AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  49,161  in Migros Ticaret AS on September 23, 2024 and sell it today you would earn a total of  564.00  from holding Migros Ticaret AS or generate 1.15% return on investment over 90 days.

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

Turkiye Petrol Rafinerileri  vs.  Migros Ticaret AS

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.

Migros Ticaret AS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Migros Ticaret AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Migros Ticaret 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 Migros Ticaret

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

The idea behind Turkiye Petrol Rafinerileri and Migros Ticaret AS 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.