Correlation Between QNB Finans and Brisa Bridgestone

Can any of the company-specific risk be diversified away by investing in both QNB Finans and Brisa Bridgestone 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 Brisa Bridgestone 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 Brisa Bridgestone Sabanci, you can compare the effects of market volatilities on QNB Finans and Brisa Bridgestone 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 Brisa Bridgestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of QNB Finans and Brisa Bridgestone.

Diversification Opportunities for QNB Finans and Brisa Bridgestone

-0.34

Correlation Coefficient

QNB Finans  Brisa Bridgestone

Very good diversification

The 3 months correlation between QNB and Brisa is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding QNB Finans Finansal and Brisa Bridgestone Sabanci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brisa Bridgestone Sabanci 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 Brisa Bridgestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brisa Bridgestone Sabanci has no effect on the direction of QNB Finans i.e., QNB Finans and Brisa Bridgestone go up and down completely randomly.

Pair Corralation between QNB Finans and Brisa Bridgestone

Assuming the 90 days trading horizon QNB Finans Finansal is expected to under-perform the Brisa Bridgestone. In addition to that, QNB Finans is 2.56 times more volatile than Brisa Bridgestone Sabanci. It trades about -0.1 of its total potential returns per unit of risk. Brisa Bridgestone Sabanci is currently generating about -0.07 per unit of volatility. If you would invest  11,400  in Brisa Bridgestone Sabanci on October 7, 2024 and sell it today you would lose (2,295) from holding Brisa Bridgestone Sabanci or give up 20.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

QNB Finans Finansal  vs.  Brisa Bridgestone Sabanci

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.

Brisa Bridgestone Sabanci

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brisa Bridgestone Sabanci are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Brisa Bridgestone may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with QNB Finans and Brisa Bridgestone

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

The idea behind QNB Finans Finansal and Brisa Bridgestone Sabanci 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.