Correlation Between Petkim Petrokimya and Tekfen Holding

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

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

Diversification Opportunities for Petkim Petrokimya and Tekfen Holding

-0.74

Correlation Coefficient

Petkim Petrokimya  Tekfen Holding

Pay attention - limited upside

The 3 months correlation between Petkim and Tekfen is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding and Tekfen Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekfen Holding AS and Petkim Petrokimya 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 Petkim Petrokimya Holding are associated (or correlated) with Tekfen Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekfen Holding AS has no effect on the direction of Petkim Petrokimya i.e., Petkim Petrokimya and Tekfen Holding go up and down completely randomly.

Pair Corralation between Petkim Petrokimya and Tekfen Holding

Assuming the 90 days trading horizon Petkim Petrokimya Holding is expected to under-perform the Tekfen Holding. But the stock apears to be less risky and, when comparing its historical volatility, Petkim Petrokimya Holding is 1.47 times less risky than Tekfen Holding. The stock trades about -0.13 of its potential returns per unit of risk. The Tekfen Holding AS is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  5,190  in Tekfen Holding AS on September 12, 2024 and sell it today you would earn a total of  2,640  from holding Tekfen Holding AS or generate 50.87% return on investment over 90 days.

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

Petkim Petrokimya Holding  vs.  Tekfen Holding AS

Petkim Petrokimya Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petkim Petrokimya Holding 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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Tekfen Holding AS

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tekfen Holding AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Tekfen Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Petkim Petrokimya and Tekfen Holding

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

The idea behind Petkim Petrokimya Holding and Tekfen Holding AS 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.