Correlation Between Turkiye Halk and Qnb Finansbank

Can any of the company-specific risk be diversified away by investing in both Turkiye Halk and Qnb Finansbank 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 Halk and Qnb Finansbank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turkiye Halk Bankasi and Qnb Finansbank AS, you can compare the effects of market volatilities on Turkiye Halk and Qnb Finansbank 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 Halk with a short position of Qnb Finansbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Halk and Qnb Finansbank.

Diversification Opportunities for Turkiye Halk and Qnb Finansbank

0.38

Correlation Coefficient

Turkiye Halk  Qnb Finansbank

Weak diversification

The 3 months correlation between Turkiye and Qnb is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Halk Bankasi and Qnb Finansbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qnb Finansbank AS and Turkiye Halk 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 Halk Bankasi are associated (or correlated) with Qnb Finansbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qnb Finansbank AS has no effect on the direction of Turkiye Halk i.e., Turkiye Halk and Qnb Finansbank go up and down completely randomly.

Pair Corralation between Turkiye Halk and Qnb Finansbank

Assuming the 90 days trading horizon Turkiye Halk Bankasi is expected to generate 0.83 times more return on investment than Qnb Finansbank. However, Turkiye Halk Bankasi is 1.21 times less risky than Qnb Finansbank. It trades about 0.01 of its potential returns per unit of risk. Qnb Finansbank AS is currently generating about -0.11 per unit of risk. If you would invest  1,638  in Turkiye Halk Bankasi on August 30, 2024 and sell it today you would lose (8.00) from holding Turkiye Halk Bankasi or give up 0.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Turkiye Halk Bankasi  vs.  Qnb Finansbank AS

Turkiye Halk Bankasi

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Turkiye Halk Bankasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Turkiye Halk is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Qnb Finansbank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qnb Finansbank AS 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 December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Turkiye Halk and Qnb Finansbank

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

The idea behind Turkiye Halk Bankasi and Qnb Finansbank AS 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.