Correlation Between Turkiye Petrol and Cuhadaroglu Metal
Can any of the company-specific risk be diversified away by investing in both Turkiye Petrol and Cuhadaroglu Metal 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 Cuhadaroglu Metal 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 Cuhadaroglu Metal Sanayi, you can compare the effects of market volatilities on Turkiye Petrol and Cuhadaroglu Metal 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 Cuhadaroglu Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Petrol and Cuhadaroglu Metal.
Diversification Opportunities for Turkiye Petrol and Cuhadaroglu Metal
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Turkiye and Cuhadaroglu is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Cuhadaroglu Metal Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuhadaroglu Metal 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 Cuhadaroglu Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuhadaroglu Metal Sanayi has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Cuhadaroglu Metal go up and down completely randomly.
Pair Corralation between Turkiye Petrol and Cuhadaroglu Metal
Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to under-perform the Cuhadaroglu Metal. But the stock apears to be less risky and, when comparing its historical volatility, Turkiye Petrol Rafinerileri is 1.61 times less risky than Cuhadaroglu Metal. The stock trades about -0.08 of its potential returns per unit of risk. The Cuhadaroglu Metal Sanayi is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,130 in Cuhadaroglu Metal Sanayi on August 29, 2024 and sell it today you would lose (34.00) from holding Cuhadaroglu Metal Sanayi or give up 1.6% 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. Cuhadaroglu Metal Sanayi
Performance |
| Timeline |
| Turkiye Petrol Rafin |
| Cuhadaroglu Metal Sanayi |
Turkiye Petrol and Cuhadaroglu Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turkiye Petrol and Cuhadaroglu Metal
The main advantage of trading using opposite Turkiye Petrol and Cuhadaroglu Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Petrol position performs unexpectedly, Cuhadaroglu Metal 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 Cuhadaroglu Metal will offset losses from the drop in Cuhadaroglu Metal's long position.| Turkiye Petrol vs. Eregli Demir ve | Turkiye Petrol vs. Turkiye Sise ve | Turkiye Petrol vs. Turkish Airlines | Turkiye Petrol vs. Petkim Petrokimya Holding |
| Cuhadaroglu Metal vs. Haci Omer Sabanci | Cuhadaroglu Metal vs. Turkiye Sise ve | Cuhadaroglu Metal vs. Turkiye Petrol Rafinerileri | Cuhadaroglu Metal vs. Turkiye Garanti Bankasi |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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