Correlation Between QNB Finans and Arcelik AS

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

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

Diversification Opportunities for QNB Finans and Arcelik AS

-0.27

Correlation Coefficient

QNB Finans  Arcelik AS

Very good diversification

The 3 months correlation between QNB and Arcelik is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding QNB Finans Finansal and Arcelik AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcelik AS and QNB Finans 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 QNB Finans Finansal are associated (or correlated) with Arcelik AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcelik AS has no effect on the direction of QNB Finans i.e., QNB Finans and Arcelik AS go up and down completely randomly.

Pair Corralation between QNB Finans and Arcelik AS

Assuming the 90 days trading horizon QNB Finans Finansal is expected to generate 12.99 times more return on investment than Arcelik AS. However, QNB Finans is 12.99 times more volatile than Arcelik AS. It trades about 0.05 of its potential returns per unit of risk. Arcelik AS is currently generating about 0.03 per unit of risk. If you would invest  1,139  in QNB Finans Finansal on October 22, 2024 and sell it today you would earn a total of  2,961  from holding QNB Finans Finansal or generate 259.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

QNB Finans Finansal  vs.  Arcelik AS

QNB Finans Finansal

Risk-Adjusted Performance

0 of 100

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 February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Arcelik AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcelik AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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 QNB Finans and Arcelik AS

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

The idea behind QNB Finans Finansal and Arcelik 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.