Correlation Between Petkim Petrokimya and Turk Telekomunikasyon
Can any of the company-specific risk be diversified away by investing in both Petkim Petrokimya and Turk Telekomunikasyon 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 Petkim Petrokimya and Turk Telekomunikasyon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petkim Petrokimya Holding and Turk Telekomunikasyon AS, you can compare the effects of market volatilities on Petkim Petrokimya and Turk Telekomunikasyon 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 Petkim Petrokimya with a short position of Turk Telekomunikasyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petkim Petrokimya and Turk Telekomunikasyon.
Diversification Opportunities for Petkim Petrokimya and Turk Telekomunikasyon
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Petkim and Turk is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Petkim Petrokimya Holding and Turk Telekomunikasyon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turk Telekomunikasyon and Petkim Petrokimya 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 Petkim Petrokimya Holding are associated (or correlated) with Turk Telekomunikasyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turk Telekomunikasyon has no effect on the direction of Petkim Petrokimya i.e., Petkim Petrokimya and Turk Telekomunikasyon go up and down completely randomly.
Pair Corralation between Petkim Petrokimya and Turk Telekomunikasyon
Assuming the 90 days trading horizon Petkim Petrokimya Holding is expected to under-perform the Turk Telekomunikasyon. In addition to that, Petkim Petrokimya is 1.05 times more volatile than Turk Telekomunikasyon AS. It trades about -0.06 of its total potential returns per unit of risk. Turk Telekomunikasyon AS is currently generating about 0.04 per unit of volatility. If you would invest 4,620 in Turk Telekomunikasyon AS on August 29, 2024 and sell it today you would earn a total of 50.00 from holding Turk Telekomunikasyon AS or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petkim Petrokimya Holding vs. Turk Telekomunikasyon AS
Performance |
| Timeline |
| Petkim Petrokimya Holding |
| Turk Telekomunikasyon |
Petkim Petrokimya and Turk Telekomunikasyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petkim Petrokimya and Turk Telekomunikasyon
The main advantage of trading using opposite Petkim Petrokimya and Turk Telekomunikasyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petkim Petrokimya position performs unexpectedly, Turk Telekomunikasyon 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 Turk Telekomunikasyon will offset losses from the drop in Turk Telekomunikasyon's long position.| Petkim Petrokimya vs. Turkiye Petrol Rafinerileri | Petkim Petrokimya vs. Aselsan Elektronik Sanayi | Petkim Petrokimya vs. Eregli Demir ve | Petkim Petrokimya vs. Turkish Airlines |
| Turk Telekomunikasyon vs. Turkcell Iletisim Hizmetleri | Turk Telekomunikasyon vs. Haci Omer Sabanci | Turk Telekomunikasyon vs. Arcelik AS | Turk Telekomunikasyon 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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