Correlation Between Turcas Petrol and Ege Endustri

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

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

Diversification Opportunities for Turcas Petrol and Ege Endustri

-0.01

Correlation Coefficient

Turcas Petrol  Ege Endustri

Good diversification

The 3 months correlation between Turcas and Ege is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Turcas Petrol AS and Ege Endustri ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Endustri ve and Turcas Petrol 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 Turcas Petrol AS are associated (or correlated) with Ege Endustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Endustri ve has no effect on the direction of Turcas Petrol i.e., Turcas Petrol and Ege Endustri go up and down completely randomly.

Pair Corralation between Turcas Petrol and Ege Endustri

Assuming the 90 days trading horizon Turcas Petrol is expected to generate 1.16 times less return on investment than Ege Endustri. But when comparing it to its historical volatility, Turcas Petrol AS is 1.09 times less risky than Ege Endustri. It trades about 0.08 of its potential returns per unit of risk. Ege Endustri ve is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  928,500  in Ege Endustri ve on December 11, 2024 and sell it today you would earn a total of  33,500  from holding Ege Endustri ve or generate 3.61% return on investment over 90 days.

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

Turcas Petrol AS  vs.  Ege Endustri ve

Turcas Petrol AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turcas Petrol AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turcas Petrol may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ege Endustri ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ege Endustri ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Turcas Petrol and Ege Endustri

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

The idea behind Turcas Petrol AS and Ege Endustri ve 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.