Correlation Between Western Asset and QNB Corp
Can any of the company-specific risk be diversified away by investing in both Western Asset and QNB Corp 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 Western Asset and QNB Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and QNB Corp, you can compare the effects of market volatilities on Western Asset and QNB Corp 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 Western Asset with a short position of QNB Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and QNB Corp.
Diversification Opportunities for Western Asset and QNB Corp
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and QNB is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and QNB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QNB Corp and Western Asset 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 Western Asset Global are associated (or correlated) with QNB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QNB Corp has no effect on the direction of Western Asset i.e., Western Asset and QNB Corp go up and down completely randomly.
Pair Corralation between Western Asset and QNB Corp
Considering the 90-day investment horizon Western Asset Global is expected to under-perform the QNB Corp. But the etf apears to be less risky and, when comparing its historical volatility, Western Asset Global is 1.18 times less risky than QNB Corp. The etf trades about -0.04 of its potential returns per unit of risk. The QNB Corp is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,140 in QNB Corp on September 3, 2024 and sell it today you would earn a total of 160.00 from holding QNB Corp or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. QNB Corp
Performance |
| Timeline |
| Western Asset Global |
| QNB Corp |
Western Asset and QNB Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and QNB Corp
The main advantage of trading using opposite Western Asset and QNB Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, QNB Corp 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 Corp will offset losses from the drop in QNB Corp's long position.| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
| QNB Corp vs. Western Asset Global | QNB Corp vs. Invesco Trust For | QNB Corp vs. Logan Ridge Finance | QNB Corp vs. Invesco Advantage MIT |
Check out your portfolio center.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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