Correlation Between Turkiye Petrol and Tumosan

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

Diversification Opportunities for Turkiye Petrol and Tumosan

0.59

Correlation Coefficient

Turkiye Petrol  Tumosan

Very weak diversification

The 3 months correlation between Turkiye and Tumosan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Tumosan Motor ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tumosan Motor ve 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 Tumosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tumosan Motor ve has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Tumosan go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Tumosan

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to generate 8.47 times more return on investment than Tumosan. However, Turkiye Petrol is 8.47 times more volatile than Tumosan Motor ve. It trades about 0.05 of its potential returns per unit of risk. Tumosan Motor ve is currently generating about 0.04 per unit of risk. If you would invest  5,067  in Turkiye Petrol Rafinerileri on September 5, 2024 and sell it today you would earn a total of  9,803  from holding Turkiye Petrol Rafinerileri or generate 193.47% 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.  Tumosan Motor ve

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

Tumosan Motor ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tumosan Motor ve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tumosan is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Turkiye Petrol and Tumosan

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

The idea behind Turkiye Petrol Rafinerileri and Tumosan Motor ve 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.