Correlation Between QNB Finans and Aselsan Elektronik

Can any of the company-specific risk be diversified away by investing in both QNB Finans and Aselsan Elektronik 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 Finans and Aselsan Elektronik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between QNB Finans Finansal and Aselsan Elektronik Sanayi, you can compare the effects of market volatilities on QNB Finans and Aselsan Elektronik 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 Finans with a short position of Aselsan Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of QNB Finans and Aselsan Elektronik.

Diversification Opportunities for QNB Finans and Aselsan Elektronik

-0.63

Correlation Coefficient

QNB Finans  Aselsan Elektronik

Excellent diversification

The 3 months correlation between QNB and Aselsan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding QNB Finans Finansal and Aselsan Elektronik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aselsan Elektronik Sanayi and QNB Finans 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 Finans Finansal are associated (or correlated) with Aselsan Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aselsan Elektronik Sanayi has no effect on the direction of QNB Finans i.e., QNB Finans and Aselsan Elektronik go up and down completely randomly.

Pair Corralation between QNB Finans and Aselsan Elektronik

Assuming the 90 days trading horizon QNB Finans Finansal is expected to under-perform the Aselsan Elektronik. In addition to that, QNB Finans is 1.69 times more volatile than Aselsan Elektronik Sanayi. It trades about -0.14 of its total potential returns per unit of risk. Aselsan Elektronik Sanayi is currently generating about 0.12 per unit of volatility. If you would invest  5,635  in Aselsan Elektronik Sanayi on February 21, 2024 and sell it today you would earn a total of  585.00  from holding Aselsan Elektronik Sanayi or generate 10.38% return on investment over 90 days.

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

QNB Finans Finansal  vs.  Aselsan Elektronik Sanayi

QNB Finans Finansal

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in QNB Finans Finansal are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, QNB Finans demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Aselsan Elektronik Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aselsan Elektronik Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Aselsan Elektronik is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with QNB Finans and Aselsan Elektronik

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

The idea behind QNB Finans Finansal and Aselsan Elektronik Sanayi 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.