Correlation Between Petrokent Turizm and Qnb Finansbank

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

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

Diversification Opportunities for Petrokent Turizm and Qnb Finansbank

-0.29

Correlation Coefficient

Petrokent Turizm  Qnb Finansbank

Very good diversification

The 3 months correlation between Petrokent and Qnb is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Petrokent Turizm AS 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 Petrokent Turizm 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 Petrokent Turizm AS 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 Petrokent Turizm i.e., Petrokent Turizm and Qnb Finansbank go up and down completely randomly.

Pair Corralation between Petrokent Turizm and Qnb Finansbank

Assuming the 90 days trading horizon Petrokent Turizm AS is expected to generate 1.28 times more return on investment than Qnb Finansbank. However, Petrokent Turizm is 1.28 times more volatile than Qnb Finansbank AS. It trades about 0.1 of its potential returns per unit of risk. Qnb Finansbank AS is currently generating about -0.03 per unit of risk. If you would invest  22,100  in Petrokent Turizm AS on October 23, 2024 and sell it today you would earn a total of  3,300  from holding Petrokent Turizm AS or generate 14.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Petrokent Turizm AS  vs.  Qnb Finansbank AS

Petrokent Turizm

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Petrokent Turizm AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Petrokent Turizm 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 fairly strong forward indicators, Qnb Finansbank is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Petrokent Turizm and Qnb Finansbank

The main advantage of trading using opposite Petrokent Turizm and Qnb Finansbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrokent Turizm 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 Petrokent Turizm AS 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.