Correlation Between Sidi Kerir and Qatar Natl

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Can any of the company-specific risk be diversified away by investing in both Sidi Kerir and Qatar Natl 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 Sidi Kerir and Qatar Natl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sidi Kerir Petrochemicals and Qatar Natl Bank, you can compare the effects of market volatilities on Sidi Kerir and Qatar Natl 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 Sidi Kerir with a short position of Qatar Natl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidi Kerir and Qatar Natl.

Diversification Opportunities for Sidi Kerir and Qatar Natl

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sidi and Qatar is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sidi Kerir Petrochemicals and Qatar Natl Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qatar Natl Bank and Sidi Kerir 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 Sidi Kerir Petrochemicals are associated (or correlated) with Qatar Natl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qatar Natl Bank has no effect on the direction of Sidi Kerir i.e., Sidi Kerir and Qatar Natl go up and down completely randomly.

Pair Corralation between Sidi Kerir and Qatar Natl

Assuming the 90 days trading horizon Sidi Kerir Petrochemicals is expected to under-perform the Qatar Natl. In addition to that, Sidi Kerir is 1.38 times more volatile than Qatar Natl Bank. It trades about -0.18 of its total potential returns per unit of risk. Qatar Natl Bank is currently generating about -0.15 per unit of volatility. If you would invest  3,452  in Qatar Natl Bank on October 9, 2024 and sell it today you would lose (162.00) from holding Qatar Natl Bank or give up 4.69% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sidi Kerir Petrochemicals  vs.  Qatar Natl Bank

 Performance 
       Timeline  
Sidi Kerir Petrochemicals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sidi Kerir Petrochemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Qatar Natl Bank 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Qatar Natl Bank are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Qatar Natl may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Sidi Kerir and Qatar Natl Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sidi Kerir and Qatar Natl

The main advantage of trading using opposite Sidi Kerir and Qatar Natl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidi Kerir position performs unexpectedly, Qatar Natl 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 Qatar Natl will offset losses from the drop in Qatar Natl's long position.
The idea behind Sidi Kerir Petrochemicals and Qatar Natl Bank 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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