Correlation Between Qnb Finansbank and Aksu Enerji

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

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

Diversification Opportunities for Qnb Finansbank and Aksu Enerji

0.76

Correlation Coefficient

Qnb Finansbank  Aksu Enerji

Poor diversification

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

Pair Corralation between Qnb Finansbank and Aksu Enerji

Assuming the 90 days trading horizon Qnb Finansbank AS is expected to generate 1.22 times more return on investment than Aksu Enerji. However, Qnb Finansbank is 1.22 times more volatile than Aksu Enerji ve. It trades about 0.22 of its potential returns per unit of risk. Aksu Enerji ve is currently generating about 0.26 per unit of risk. If you would invest  26,650  in Qnb Finansbank AS on December 21, 2024 and sell it today you would earn a total of  14,800  from holding Qnb Finansbank AS or generate 55.53% return on investment over 90 days.

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

Qnb Finansbank AS  vs.  Aksu Enerji ve

Qnb Finansbank AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Qnb Finansbank AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Qnb Finansbank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Aksu Enerji ve

Risk-Adjusted Performance

Solid

Over the last 90 days Aksu Enerji ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak forward indicators, Aksu Enerji demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qnb Finansbank and Aksu Enerji

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

The idea behind Qnb Finansbank AS and Aksu Enerji ve 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.