Correlation Between Turkiye Petrol and Konya Cimento

Can any of the company-specific risk be diversified away by investing in both Turkiye Petrol and Konya Cimento 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 Konya Cimento 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 Konya Cimento Sanayi, you can compare the effects of market volatilities on Turkiye Petrol and Konya Cimento 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 Konya Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Petrol and Konya Cimento.

Diversification Opportunities for Turkiye Petrol and Konya Cimento

0.15

Correlation Coefficient

Turkiye Petrol  Konya Cimento

Average diversification

The 3 months correlation between Turkiye and Konya is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Konya Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konya Cimento Sanayi 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 Konya Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konya Cimento Sanayi has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Konya Cimento go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Konya Cimento

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to generate 0.57 times more return on investment than Konya Cimento. However, Turkiye Petrol Rafinerileri is 1.74 times less risky than Konya Cimento. It trades about 0.02 of its potential returns per unit of risk. Konya Cimento Sanayi is currently generating about -0.01 per unit of risk. If you would invest  13,648  in Turkiye Petrol Rafinerileri on September 23, 2024 and sell it today you would earn a total of  902.00  from holding Turkiye Petrol Rafinerileri or generate 6.61% 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.  Konya Cimento Sanayi

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 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.

Konya Cimento Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Konya Cimento Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Konya Cimento may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Turkiye Petrol and Konya Cimento

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

The idea behind Turkiye Petrol Rafinerileri and Konya Cimento Sanayi 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.