Correlation Between Koc Holding and Qnb Finansbank

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

Diversification Opportunities for Koc Holding and Qnb Finansbank

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Koc and Qnb is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS 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 Koc Holding 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 Koc Holding AS 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 Koc Holding i.e., Koc Holding and Qnb Finansbank go up and down completely randomly.

Pair Corralation between Koc Holding and Qnb Finansbank

Assuming the 90 days trading horizon Koc Holding AS is expected to generate 1.53 times more return on investment than Qnb Finansbank. However, Koc Holding is 1.53 times more volatile than Qnb Finansbank AS. It trades about 0.35 of its potential returns per unit of risk. Qnb Finansbank AS is currently generating about -0.13 per unit of risk. If you would invest  17,300  in Koc Holding AS on August 31, 2024 and sell it today you would earn a total of  2,800  from holding Koc Holding AS or generate 16.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Koc Holding AS  vs.  Qnb Finansbank AS

 Performance 
       Timeline  
Koc Holding AS 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Koc Holding AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Koc Holding is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
Qnb Finansbank AS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Koc Holding and Qnb Finansbank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Koc Holding and Qnb Finansbank

The main advantage of trading using opposite Koc Holding and Qnb Finansbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koc Holding 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 Koc Holding AS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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