Correlation Between Euro Menkul and QNB Finans

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

By analyzing existing cross correlation between Euro Menkul Kiymet and QNB Finans Finansal, you can compare the effects of market volatilities on Euro Menkul and QNB Finans 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 Euro Menkul with a short position of QNB Finans. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euro Menkul and QNB Finans.

Diversification Opportunities for Euro Menkul and QNB Finans

0.52

Correlation Coefficient

Euro Menkul  QNB Finans

Very weak diversification

The 3 months correlation between Euro and QNB is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Euro Menkul Kiymet and QNB Finans Finansal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QNB Finans Finansal and Euro Menkul 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 Euro Menkul Kiymet are associated (or correlated) with QNB Finans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QNB Finans Finansal has no effect on the direction of Euro Menkul i.e., Euro Menkul and QNB Finans go up and down completely randomly.

Pair Corralation between Euro Menkul and QNB Finans

Assuming the 90 days trading horizon Euro Menkul Kiymet is expected to generate 0.5 times more return on investment than QNB Finans. However, Euro Menkul Kiymet is 2.01 times less risky than QNB Finans. It trades about -0.01 of its potential returns per unit of risk. QNB Finans Finansal is currently generating about -0.17 per unit of risk. If you would invest  1,010  in Euro Menkul Kiymet on December 2, 2024 and sell it today you would lose (82.00) from holding Euro Menkul Kiymet or give up 8.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	67.69%
Values	Daily Returns

Euro Menkul Kiymet  vs.  QNB Finans Finansal

Euro Menkul Kiymet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Euro Menkul Kiymet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Euro Menkul is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

QNB Finans Finansal

Risk-Adjusted Performance

Very Weak

Over the last 90 days QNB Finans Finansal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Euro Menkul and QNB Finans

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

The idea behind Euro Menkul Kiymet and QNB Finans Finansal 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.