Correlation Between Turkiye Petrol and BINHO

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Can any of the company-specific risk be diversified away by investing in both Turkiye Petrol and BINHO 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 Turkiye Petrol and BINHO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turkiye Petrol Rafinerileri and BINHO, you can compare the effects of market volatilities on Turkiye Petrol and BINHO 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 Turkiye Petrol with a short position of BINHO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Petrol and BINHO.

Diversification Opportunities for Turkiye Petrol and BINHO

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Turkiye and BINHO is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and BINHO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BINHO and Turkiye 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 Turkiye Petrol Rafinerileri are associated (or correlated) with BINHO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BINHO has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and BINHO go up and down completely randomly.

Pair Corralation between Turkiye Petrol and BINHO

Assuming the 90 days trading horizon Turkiye Petrol is expected to generate 2.02 times less return on investment than BINHO. But when comparing it to its historical volatility, Turkiye Petrol Rafinerileri is 2.39 times less risky than BINHO. It trades about 0.07 of its potential returns per unit of risk. BINHO is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  29,750  in BINHO on October 7, 2024 and sell it today you would earn a total of  1,950  from holding BINHO or generate 6.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Turkiye Petrol Rafinerileri  vs.  BINHO

 Performance 
       Timeline  
Turkiye Petrol Rafin 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 fairly strong forward indicators, Turkiye Petrol is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
BINHO 

Risk-Adjusted Performance

0 of 100

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

Turkiye Petrol and BINHO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Turkiye Petrol and BINHO

The main advantage of trading using opposite Turkiye Petrol and BINHO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Petrol position performs unexpectedly, BINHO 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 BINHO will offset losses from the drop in BINHO's long position.
The idea behind Turkiye Petrol Rafinerileri and BINHO 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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