Correlation Between Qnb Finansbank and Makina Takim

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

Diversification Opportunities for Qnb Finansbank and Makina Takim

-0.51

Correlation Coefficient

Qnb Finansbank  Makina Takim

Excellent diversification

The 3 months correlation between Qnb and Makina is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Qnb Finansbank AS and Makina Takim Endustrisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makina Takim Endustrisi 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 Makina Takim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makina Takim Endustrisi has no effect on the direction of Qnb Finansbank i.e., Qnb Finansbank and Makina Takim go up and down completely randomly.

Pair Corralation between Qnb Finansbank and Makina Takim

Assuming the 90 days trading horizon Qnb Finansbank AS is expected to generate 1.38 times more return on investment than Makina Takim. However, Qnb Finansbank is 1.38 times more volatile than Makina Takim Endustrisi. It trades about 0.06 of its potential returns per unit of risk. Makina Takim Endustrisi is currently generating about 0.03 per unit of risk. If you would invest  15,190  in Qnb Finansbank AS on October 4, 2024 and sell it today you would earn a total of  11,360  from holding Qnb Finansbank AS or generate 74.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.7%
Values	Daily Returns

Qnb Finansbank AS  vs.  Makina Takim Endustrisi

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.

Makina Takim Endustrisi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Makina Takim Endustrisi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Makina Takim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qnb Finansbank and Makina Takim

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

The idea behind Qnb Finansbank AS and Makina Takim Endustrisi 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.