Correlation Between Ford Otomotiv and Turkiye Petrol
Can any of the company-specific risk be diversified away by investing in both Ford Otomotiv 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 Ford Otomotiv and Turkiye Petrol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Otomotiv Sanayi and Turkiye Petrol Rafinerileri, you can compare the effects of market volatilities on Ford Otomotiv 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 Ford Otomotiv with a short position of Turkiye Petrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford Otomotiv and Turkiye Petrol.
Diversification Opportunities for Ford Otomotiv and Turkiye Petrol
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Turkiye is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ford Otomotiv Sanayi 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 Ford Otomotiv 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 Ford Otomotiv Sanayi 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 Ford Otomotiv i.e., Ford Otomotiv and Turkiye Petrol go up and down completely randomly.
Pair Corralation between Ford Otomotiv and Turkiye Petrol
Assuming the 90 days trading horizon Ford Otomotiv Sanayi is expected to under-perform the Turkiye Petrol. But the stock apears to be less risky and, when comparing its historical volatility, Ford Otomotiv Sanayi is 1.35 times less risky than Turkiye Petrol. The stock trades about -0.16 of its potential returns per unit of risk. The Turkiye Petrol Rafinerileri is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 14,440 in Turkiye Petrol Rafinerileri on October 20, 2024 and sell it today you would earn a total of 370.00 from holding Turkiye Petrol Rafinerileri or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Otomotiv Sanayi vs. Turkiye Petrol Rafinerileri
Performance |
| Timeline |
| Ford Otomotiv Sanayi |
| Turkiye Petrol Rafin |
Ford Otomotiv and Turkiye Petrol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford Otomotiv and Turkiye Petrol
The main advantage of trading using opposite Ford Otomotiv and Turkiye Petrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford Otomotiv 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.| Ford Otomotiv vs. Eregli Demir ve | Ford Otomotiv vs. Tofas Turk Otomobil | Ford Otomotiv vs. Turkiye Petrol Rafinerileri | Ford Otomotiv vs. Turkiye Sise ve |
| Turkiye Petrol vs. Eregli Demir ve | Turkiye Petrol vs. Turkiye Sise ve | Turkiye Petrol vs. Turkish Airlines | Turkiye Petrol vs. Petkim Petrokimya Holding |
Check out your portfolio center.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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