Correlation Between Qnb Finansbank and KOC METALURJI

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

Diversification Opportunities for Qnb Finansbank and KOC METALURJI

-0.36

Correlation Coefficient

Qnb Finansbank  KOC METALURJI

Very good diversification

The 3 months correlation between Qnb and KOC is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Qnb Finansbank AS and KOC METALURJI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOC METALURJI 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 KOC METALURJI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOC METALURJI has no effect on the direction of Qnb Finansbank i.e., Qnb Finansbank and KOC METALURJI go up and down completely randomly.

Pair Corralation between Qnb Finansbank and KOC METALURJI

Assuming the 90 days trading horizon Qnb Finansbank AS is expected to under-perform the KOC METALURJI. But the stock apears to be less risky and, when comparing its historical volatility, Qnb Finansbank AS is 1.22 times less risky than KOC METALURJI. The stock trades about -0.06 of its potential returns per unit of risk. The KOC METALURJI is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,491  in KOC METALURJI on October 11, 2024 and sell it today you would earn a total of  174.00  from holding KOC METALURJI or generate 11.67% return on investment over 90 days.

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

Qnb Finansbank AS  vs.  KOC METALURJI

Qnb Finansbank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qnb Finansbank AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent 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.

KOC METALURJI

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KOC METALURJI are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, KOC METALURJI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qnb Finansbank and KOC METALURJI

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

The idea behind Qnb Finansbank AS and KOC METALURJI 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..