Correlation Between Burcelik Bursa and Turkiye Petrol

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

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

Diversification Opportunities for Burcelik Bursa and Turkiye Petrol

-0.1

Correlation Coefficient

Burcelik Bursa  Turkiye Petrol

Good diversification

The 3 months correlation between Burcelik and Turkiye is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Burcelik Bursa Celik and Turkiye Petrol Rafinerileri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Petrol Rafin and Burcelik Bursa 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 Burcelik Bursa Celik are associated (or correlated) with Turkiye Petrol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Petrol Rafin has no effect on the direction of Burcelik Bursa i.e., Burcelik Bursa and Turkiye Petrol go up and down completely randomly.

Pair Corralation between Burcelik Bursa and Turkiye Petrol

Assuming the 90 days trading horizon Burcelik Bursa Celik is expected to generate 1.12 times more return on investment than Turkiye Petrol. However, Burcelik Bursa is 1.12 times more volatile than Turkiye Petrol Rafinerileri. It trades about 0.05 of its potential returns per unit of risk. Turkiye Petrol Rafinerileri is currently generating about 0.05 per unit of risk. If you would invest  461.00  in Burcelik Bursa Celik on September 27, 2024 and sell it today you would earn a total of  1,490  from holding Burcelik Bursa Celik or generate 323.21% return on investment over 90 days.

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

Burcelik Bursa Celik  vs.  Turkiye Petrol Rafinerileri

Burcelik Bursa Celik

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Burcelik Bursa and Turkiye Petrol

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

The idea behind Burcelik Bursa Celik and Turkiye Petrol Rafinerileri 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.