Correlation Between Tumosan and Turkiye Petrol

Can any of the company-specific risk be diversified away by investing in both Tumosan and Turkiye Petrol 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 Tumosan and Turkiye Petrol into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tumosan Motor ve and Turkiye Petrol Rafinerileri, you can compare the effects of market volatilities on Tumosan and Turkiye Petrol 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 Tumosan with a short position of Turkiye Petrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tumosan and Turkiye Petrol.

Diversification Opportunities for Tumosan and Turkiye Petrol

0.76

Correlation Coefficient

Tumosan  Turkiye Petrol

Poor diversification

The 3 months correlation between Tumosan and Turkiye is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tumosan Motor ve and Turkiye Petrol Rafinerileri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Petrol Rafin and Tumosan 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 Tumosan Motor ve are associated (or correlated) with Turkiye Petrol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Petrol Rafin has no effect on the direction of Tumosan i.e., Tumosan and Turkiye Petrol go up and down completely randomly.

Pair Corralation between Tumosan and Turkiye Petrol

Assuming the 90 days trading horizon Tumosan is expected to generate 2.33 times less return on investment than Turkiye Petrol. In addition to that, Tumosan is 2.62 times more volatile than Turkiye Petrol Rafinerileri. It trades about 0.08 of its total potential returns per unit of risk. Turkiye Petrol Rafinerileri is currently generating about 0.46 per unit of volatility. If you would invest  16,542  in Turkiye Petrol Rafinerileri on February 2, 2024 and sell it today you would earn a total of  3,038  from holding Turkiye Petrol Rafinerileri or generate 18.37% return on investment over 90 days.

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

Tumosan Motor ve  vs.  Turkiye Petrol Rafinerileri

Tumosan Motor ve

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tumosan Motor ve are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Tumosan unveiled solid returns over the last few months and may actually be approaching a breakup point.

Turkiye Petrol Rafin

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Petrol Rafinerileri are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Turkiye Petrol demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tumosan and Turkiye Petrol

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

The idea behind Tumosan Motor ve and Turkiye Petrol Rafinerileri 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.