Correlation Between Gentas Genel and Turkiye Petrol

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

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

Diversification Opportunities for Gentas Genel and Turkiye Petrol

0.15

Correlation Coefficient

Gentas Genel  Turkiye Petrol

Average diversification

The 3 months correlation between Gentas and Turkiye is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gentas Genel Metal 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 Gentas Genel 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 Gentas Genel Metal 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 Gentas Genel i.e., Gentas Genel and Turkiye Petrol go up and down completely randomly.

Pair Corralation between Gentas Genel and Turkiye Petrol

Assuming the 90 days trading horizon Gentas Genel Metal is expected to generate 1.4 times more return on investment than Turkiye Petrol. However, Gentas Genel is 1.4 times more volatile than Turkiye Petrol Rafinerileri. It trades about 0.13 of its potential returns per unit of risk. Turkiye Petrol Rafinerileri is currently generating about 0.07 per unit of risk. If you would invest  816.00  in Gentas Genel Metal on September 12, 2024 and sell it today you would earn a total of  131.00  from holding Gentas Genel Metal or generate 16.05% return on investment over 90 days.

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

Gentas Genel Metal  vs.  Turkiye Petrol Rafinerileri

Gentas Genel Metal

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gentas Genel Metal are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Gentas Genel demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Turkiye Petrol Rafin

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Petrol Rafinerileri are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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 Gentas Genel and Turkiye Petrol

The main advantage of trading using opposite Gentas Genel and Turkiye Petrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentas Genel 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 Gentas Genel Metal 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.