Correlation Between Turkiye Petrol and Metemtur Yatrm

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

Diversification Opportunities for Turkiye Petrol and Metemtur Yatrm

-0.25

Correlation Coefficient

Turkiye Petrol  Metemtur Yatrm

Very good diversification

The 3 months correlation between Turkiye and Metemtur is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Metemtur Yatrm Enerji in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metemtur Yatrm Enerji 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 Metemtur Yatrm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metemtur Yatrm Enerji has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Metemtur Yatrm go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Metemtur Yatrm

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to generate 5.43 times more return on investment than Metemtur Yatrm. However, Turkiye Petrol is 5.43 times more volatile than Metemtur Yatrm Enerji. It trades about 0.05 of its potential returns per unit of risk. Metemtur Yatrm Enerji is currently generating about 0.08 per unit of risk. If you would invest  6,443  in Turkiye Petrol Rafinerileri on October 5, 2024 and sell it today you would earn a total of  8,167  from holding Turkiye Petrol Rafinerileri or generate 126.76% return on investment over 90 days.

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

Turkiye Petrol Rafinerileri  vs.  Metemtur Yatrm Enerji

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.

Metemtur Yatrm Enerji

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metemtur Yatrm Enerji are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Metemtur Yatrm demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Petrol and Metemtur Yatrm

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

The idea behind Turkiye Petrol Rafinerileri and Metemtur Yatrm Enerji 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.