Correlation Between Makina Takim and Qnb Finansbank

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

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

Diversification Opportunities for Makina Takim and Qnb Finansbank

-0.51

Correlation Coefficient

Makina Takim  Qnb Finansbank

Excellent diversification

The 3 months correlation between Makina and Qnb is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Makina Takim Endustrisi 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 Makina Takim 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 Makina Takim Endustrisi 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 Makina Takim i.e., Makina Takim and Qnb Finansbank go up and down completely randomly.

Pair Corralation between Makina Takim and Qnb Finansbank

Assuming the 90 days trading horizon Makina Takim Endustrisi is expected to generate 1.53 times more return on investment than Qnb Finansbank. However, Makina Takim is 1.53 times more volatile than Qnb Finansbank AS. It trades about 0.11 of its potential returns per unit of risk. Qnb Finansbank AS is currently generating about -0.09 per unit of risk. If you would invest  597.00  in Makina Takim Endustrisi on October 4, 2024 and sell it today you would earn a total of  112.00  from holding Makina Takim Endustrisi or generate 18.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Makina Takim Endustrisi  vs.  Qnb Finansbank AS

Makina Takim Endustrisi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Makina Takim Endustrisi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Makina Takim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Makina Takim and Qnb Finansbank

The main advantage of trading using opposite Makina Takim and Qnb Finansbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makina Takim 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 Makina Takim Endustrisi 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.