Correlation Between Petkim Petrokimya and Zorlu Enerji

Can any of the company-specific risk be diversified away by investing in both Petkim Petrokimya and Zorlu Enerji 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 Zorlu Enerji 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 Zorlu Enerji Elektrik, you can compare the effects of market volatilities on Petkim Petrokimya and Zorlu Enerji 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 Zorlu Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petkim Petrokimya and Zorlu Enerji.

Diversification Opportunities for Petkim Petrokimya and Zorlu Enerji

0.21

Correlation Coefficient

Petkim Petrokimya  Zorlu Enerji

Modest diversification

The 3 months correlation between Petkim and Zorlu is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding and Zorlu Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zorlu Enerji Elektrik 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 Zorlu Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zorlu Enerji Elektrik has no effect on the direction of Petkim Petrokimya i.e., Petkim Petrokimya and Zorlu Enerji go up and down completely randomly.

Pair Corralation between Petkim Petrokimya and Zorlu Enerji

Assuming the 90 days trading horizon Petkim Petrokimya is expected to generate 3.86 times less return on investment than Zorlu Enerji. In addition to that, Petkim Petrokimya is 1.13 times more volatile than Zorlu Enerji Elektrik. It trades about 0.01 of its total potential returns per unit of risk. Zorlu Enerji Elektrik is currently generating about 0.06 per unit of volatility. If you would invest  431.00  in Zorlu Enerji Elektrik on September 24, 2024 and sell it today you would earn a total of  6.00  from holding Zorlu Enerji Elektrik or generate 1.39% return on investment over 90 days.

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

Petkim Petrokimya Holding  vs.  Zorlu Enerji Elektrik

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.

Zorlu Enerji Elektrik

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Petkim Petrokimya and Zorlu Enerji

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

The idea behind Petkim Petrokimya Holding and Zorlu Enerji Elektrik 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.