Correlation Between Turkiye Petrol and Cemas Dokum

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

Diversification Opportunities for Turkiye Petrol and Cemas Dokum

-0.1

Correlation Coefficient

Turkiye Petrol  Cemas Dokum

Good diversification

The @@bw1eo months correlation between Turkiye and Cemas is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Cemas Dokum Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemas Dokum 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 Cemas Dokum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemas Dokum Sanayi has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Cemas Dokum go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Cemas Dokum

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to generate 8.29 times more return on investment than Cemas Dokum. However, Turkiye Petrol is 8.29 times more volatile than Cemas Dokum Sanayi. It trades about 0.05 of its potential returns per unit of risk. Cemas Dokum Sanayi is currently generating about 0.07 per unit of risk. If you would invest  3,058  in Turkiye Petrol Rafinerileri on February 4, 2024 and sell it today you would earn a total of  17,072  from holding Turkiye Petrol Rafinerileri or generate 558.27% return on investment over 90 days.

Time Period	@@bw1EO Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Turkiye Petrol Rafinerileri  vs.  Cemas Dokum Sanayi

Turkiye Petrol Rafin

Risk-Adjusted Performance

38 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Petrol Rafinerileri are ranked lower than 38 (%) 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.

Cemas Dokum Sanayi

Risk-Adjusted Performance

8 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cemas Dokum Sanayi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Cemas Dokum demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Petrol and Cemas Dokum

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

The idea behind Turkiye Petrol Rafinerileri and Cemas Dokum 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.