Correlation Between Ekiz Kimya and Turkiye Petrol

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

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

Diversification Opportunities for Ekiz Kimya and Turkiye Petrol

-0.1

Correlation Coefficient

Ekiz Kimya  Turkiye Petrol

Good diversification

The 3 months correlation between Ekiz and Turkiye is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ekiz Kimya Sanayi 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 Ekiz Kimya 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 Ekiz Kimya Sanayi 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 Ekiz Kimya i.e., Ekiz Kimya and Turkiye Petrol go up and down completely randomly.

Pair Corralation between Ekiz Kimya and Turkiye Petrol

Assuming the 90 days trading horizon Ekiz Kimya Sanayi is expected to generate 2.4 times more return on investment than Turkiye Petrol. However, Ekiz Kimya is 2.4 times more volatile than Turkiye Petrol Rafinerileri. It trades about 0.03 of its potential returns per unit of risk. Turkiye Petrol Rafinerileri is currently generating about 0.03 per unit of risk. If you would invest  4,948  in Ekiz Kimya Sanayi on October 5, 2024 and sell it today you would earn a total of  692.00  from holding Ekiz Kimya Sanayi or generate 13.99% return on investment over 90 days.

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

Ekiz Kimya Sanayi  vs.  Turkiye Petrol Rafinerileri

Ekiz Kimya Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ekiz Kimya Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ekiz Kimya is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Ekiz Kimya and Turkiye Petrol

The main advantage of trading using opposite Ekiz Kimya and Turkiye Petrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekiz Kimya 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 Ekiz Kimya Sanayi 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.