Correlation Between QNB Finans and Tekfen Holding

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

Diversification Opportunities for QNB Finans and Tekfen Holding

0.79

Correlation Coefficient

QNB Finans  Tekfen Holding

Poor diversification

The 3 months correlation between QNB and Tekfen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding QNB Finans Finansal and Tekfen Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekfen Holding 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 Tekfen Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekfen Holding AS has no effect on the direction of QNB Finans i.e., QNB Finans and Tekfen Holding go up and down completely randomly.

Pair Corralation between QNB Finans and Tekfen Holding

Assuming the 90 days trading horizon QNB Finans Finansal is expected to under-perform the Tekfen Holding. In addition to that, QNB Finans is 3.44 times more volatile than Tekfen Holding AS. It trades about -0.17 of its total potential returns per unit of risk. Tekfen Holding AS is currently generating about -0.09 per unit of volatility. If you would invest  8,280  in Tekfen Holding AS on December 1, 2024 and sell it today you would lose (1,240) from holding Tekfen Holding AS or give up 14.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	68.75%
Values	Daily Returns

QNB Finans Finansal  vs.  Tekfen Holding AS

QNB Finans Finansal

Risk-Adjusted Performance

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

Tekfen Holding AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tekfen Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with QNB Finans and Tekfen Holding

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

The idea behind QNB Finans Finansal and Tekfen Holding 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.