Correlation Between Turkiye Petrol and Ihlas Holding

Can any of the company-specific risk be diversified away by investing in both Turkiye Petrol and Ihlas 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 Turkiye Petrol and Ihlas Holding 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 Ihlas Holding AS, you can compare the effects of market volatilities on Turkiye Petrol and Ihlas 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 Turkiye Petrol with a short position of Ihlas Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Petrol and Ihlas Holding.

Diversification Opportunities for Turkiye Petrol and Ihlas Holding

0.12

Correlation Coefficient

Turkiye Petrol  Ihlas Holding

Average diversification

The 3 months correlation between Turkiye and Ihlas is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Ihlas Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihlas Holding AS 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 Ihlas Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihlas Holding AS has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Ihlas Holding go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Ihlas Holding

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to under-perform the Ihlas Holding. But the stock apears to be less risky and, when comparing its historical volatility, Turkiye Petrol Rafinerileri is 3.73 times less risky than Ihlas Holding. The stock trades about -0.22 of its potential returns per unit of risk. The Ihlas Holding AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  355.00  in Ihlas Holding AS on October 11, 2024 and sell it today you would earn a total of  22.00  from holding Ihlas Holding AS or generate 6.2% return on investment over 90 days.

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

Turkiye Petrol Rafinerileri  vs.  Ihlas Holding AS

Turkiye Petrol Rafin

Risk-Adjusted Performance

0 of 100

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.

Ihlas Holding AS

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Ihlas Holding AS are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Ihlas Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Petrol and Ihlas Holding

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

The idea behind Turkiye Petrol Rafinerileri and Ihlas 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.