Correlation Between Koc Holding and Turkiye Petrol

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

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

Diversification Opportunities for Koc Holding and Turkiye Petrol

0.91

Correlation Coefficient

Koc Holding  Turkiye Petrol

Almost no diversification

The 3 months correlation between Koc and Turkiye is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS 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 Koc Holding 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 Koc Holding AS 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 Koc Holding i.e., Koc Holding and Turkiye Petrol go up and down completely randomly.

Pair Corralation between Koc Holding and Turkiye Petrol

Assuming the 90 days trading horizon Koc Holding AS is expected to under-perform the Turkiye Petrol. In addition to that, Koc Holding is 1.16 times more volatile than Turkiye Petrol Rafinerileri. It trades about -0.29 of its total potential returns per unit of risk. Turkiye Petrol Rafinerileri is currently generating about -0.21 per unit of volatility. If you would invest  14,740  in Turkiye Petrol Rafinerileri on November 28, 2024 and sell it today you would lose (2,390) from holding Turkiye Petrol Rafinerileri or give up 16.21% of portfolio value over 90 days.

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

Koc Holding AS  vs.  Turkiye Petrol Rafinerileri

Koc Holding AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koc Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Turkiye Petrol Rafin

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Koc Holding and Turkiye Petrol

The main advantage of trading using opposite Koc Holding and Turkiye Petrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koc Holding 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 Koc Holding AS 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.