Correlation Between QNB Finans and Bursa Cimento

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

Diversification Opportunities for QNB Finans and Bursa Cimento

-0.76

Correlation Coefficient

QNB Finans  Bursa Cimento

Pay attention - limited upside

The 3 months correlation between QNB and Bursa is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding QNB Finans Finansal and Bursa Cimento Fabrikasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bursa Cimento Fabrikasi 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 Bursa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bursa Cimento Fabrikasi has no effect on the direction of QNB Finans i.e., QNB Finans and Bursa Cimento go up and down completely randomly.

Pair Corralation between QNB Finans and Bursa Cimento

Assuming the 90 days trading horizon QNB Finans Finansal is expected to under-perform the Bursa Cimento. In addition to that, QNB Finans is 3.02 times more volatile than Bursa Cimento Fabrikasi. It trades about -0.13 of its total potential returns per unit of risk. Bursa Cimento Fabrikasi is currently generating about 0.24 per unit of volatility. If you would invest  641.00  in Bursa Cimento Fabrikasi on October 26, 2024 and sell it today you would earn a total of  261.00  from holding Bursa Cimento Fabrikasi or generate 40.72% return on investment over 90 days.

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

QNB Finans Finansal  vs.  Bursa Cimento Fabrikasi

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.

Bursa Cimento Fabrikasi

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bursa Cimento Fabrikasi are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bursa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QNB Finans and Bursa Cimento

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

The idea behind QNB Finans Finansal and Bursa Cimento Fabrikasi 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.