Correlation Between QNB Corp and Southeastern Banking
Can any of the company-specific risk be diversified away by investing in both QNB Corp and Southeastern Banking 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 Corp and Southeastern Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QNB Corp and Southeastern Banking Corp, you can compare the effects of market volatilities on QNB Corp and Southeastern Banking 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 Corp with a short position of Southeastern Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of QNB Corp and Southeastern Banking.
Diversification Opportunities for QNB Corp and Southeastern Banking
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QNB and Southeastern is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding QNB Corp and Southeastern Banking Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southeastern Banking Corp and QNB Corp 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 Corp are associated (or correlated) with Southeastern Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southeastern Banking Corp has no effect on the direction of QNB Corp i.e., QNB Corp and Southeastern Banking go up and down completely randomly.
Pair Corralation between QNB Corp and Southeastern Banking
Given the investment horizon of 90 days QNB Corp is expected to generate 0.68 times more return on investment than Southeastern Banking. However, QNB Corp is 1.46 times less risky than Southeastern Banking. It trades about 0.24 of its potential returns per unit of risk. Southeastern Banking Corp is currently generating about 0.09 per unit of risk. If you would invest 2,283 in QNB Corp on August 29, 2024 and sell it today you would earn a total of 1,017 from holding QNB Corp or generate 44.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
QNB Corp vs. Southeastern Banking Corp
Performance |
| Timeline |
| QNB Corp |
| Southeastern Banking Corp |
QNB Corp and Southeastern Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QNB Corp and Southeastern Banking
The main advantage of trading using opposite QNB Corp and Southeastern Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QNB Corp position performs unexpectedly, Southeastern Banking 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 Southeastern Banking will offset losses from the drop in Southeastern Banking's long position.| QNB Corp vs. Invesco High Income | QNB Corp vs. Blackrock Muniholdings Ny | QNB Corp vs. Nuveen California Select | QNB Corp vs. MFS Investment Grade |
| Southeastern Banking vs. Israel Discount Bank | Southeastern Banking vs. Baraboo Bancorporation | Southeastern Banking vs. Danske Bank AS | Southeastern Banking vs. Jyske Bank AS |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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