Correlation Between Turkiye Kalkinma and Qnb Finansbank

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

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

Diversification Opportunities for Turkiye Kalkinma and Qnb Finansbank

0.77

Correlation Coefficient

Turkiye Kalkinma  Qnb Finansbank

Poor diversification

The 3 months correlation between Turkiye and Qnb is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Kalkinma Bankasi and Qnb Finansbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qnb Finansbank AS and Turkiye Kalkinma 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 Turkiye Kalkinma Bankasi are associated (or correlated) with Qnb Finansbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qnb Finansbank AS has no effect on the direction of Turkiye Kalkinma i.e., Turkiye Kalkinma and Qnb Finansbank go up and down completely randomly.

Pair Corralation between Turkiye Kalkinma and Qnb Finansbank

Assuming the 90 days trading horizon Turkiye Kalkinma Bankasi is expected to under-perform the Qnb Finansbank. But the stock apears to be less risky and, when comparing its historical volatility, Turkiye Kalkinma Bankasi is 1.06 times less risky than Qnb Finansbank. The stock trades about 0.0 of its potential returns per unit of risk. The Qnb Finansbank AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  27,100  in Qnb Finansbank AS on March 11, 2024 and sell it today you would earn a total of  3,175  from holding Qnb Finansbank AS or generate 11.72% return on investment over 90 days.

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

Turkiye Kalkinma Bankasi  vs.  Qnb Finansbank AS

Turkiye Kalkinma Bankasi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Kalkinma Bankasi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Turkiye Kalkinma may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Qnb Finansbank AS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Qnb Finansbank AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental drivers, Qnb Finansbank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turkiye Kalkinma and Qnb Finansbank

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

The idea behind Turkiye Kalkinma Bankasi and Qnb Finansbank 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.