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

0.36

Correlation Coefficient

Turcas Petrol  Ege Endustri

Weak diversification

The 3 months correlation between Turcas and Ege is 0.36. 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 AS is expected to generate 1.52 times more return on investment than Ege Endustri. However, Turcas Petrol is 1.52 times more volatile than Ege Endustri ve. It trades about 0.1 of its potential returns per unit of risk. Ege Endustri ve is currently generating about -0.03 per unit of risk. If you would invest  2,880  in Turcas Petrol AS on December 28, 2024 and sell it today you would earn a total of  620.00  from holding Turcas Petrol AS or generate 21.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Turcas Petrol AS  vs.  Ege Endustri ve

Turcas Petrol AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Turcas Petrol AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turcas Petrol demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 fairly strong forward indicators, Ege Endustri is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.