Correlation Between Turkiye Petrol and Yesil Yapi

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

Diversification Opportunities for Turkiye Petrol and Yesil Yapi

0.47

Correlation Coefficient

Turkiye Petrol  Yesil Yapi

Very weak diversification

The 3 months correlation between Turkiye and Yesil is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Yesil Yapi Endustrisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yesil Yapi Endustrisi 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 Yesil Yapi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yesil Yapi Endustrisi has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Yesil Yapi go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Yesil Yapi

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to generate 0.4 times more return on investment than Yesil Yapi. However, Turkiye Petrol Rafinerileri is 2.47 times less risky than Yesil Yapi. It trades about -0.01 of its potential returns per unit of risk. Yesil Yapi Endustrisi is currently generating about -0.01 per unit of risk. If you would invest  15,155  in Turkiye Petrol Rafinerileri on October 22, 2024 and sell it today you would lose (345.00) from holding Turkiye Petrol Rafinerileri or give up 2.28% of portfolio value over 90 days.

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

Turkiye Petrol Rafinerileri  vs.  Yesil Yapi Endustrisi

Turkiye Petrol Rafin

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Petrol Rafinerileri are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Yesil Yapi Endustrisi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yesil Yapi Endustrisi are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Yesil Yapi demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Petrol and Yesil Yapi

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

The idea behind Turkiye Petrol Rafinerileri and Yesil Yapi Endustrisi 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.