Correlation Between QNB Corp and Summit Bancshares
Can any of the company-specific risk be diversified away by investing in both QNB Corp and Summit Bancshares 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 Summit Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QNB Corp and Summit Bancshares, you can compare the effects of market volatilities on QNB Corp and Summit Bancshares 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 Summit Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of QNB Corp and Summit Bancshares.
Diversification Opportunities for QNB Corp and Summit Bancshares
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between QNB and Summit is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding QNB Corp and Summit Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bancshares 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 Summit Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bancshares has no effect on the direction of QNB Corp i.e., QNB Corp and Summit Bancshares go up and down completely randomly.
Pair Corralation between QNB Corp and Summit Bancshares
Given the investment horizon of 90 days QNB Corp is expected to generate 0.94 times more return on investment than Summit Bancshares. However, QNB Corp is 1.07 times less risky than Summit Bancshares. It trades about 0.04 of its potential returns per unit of risk. Summit Bancshares is currently generating about 0.03 per unit of risk. If you would invest 2,395 in QNB Corp on August 26, 2024 and sell it today you would earn a total of 929.00 from holding QNB Corp or generate 38.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.6% |
| Values | Daily Returns |
QNB Corp vs. Summit Bancshares
Performance |
| Timeline |
| QNB Corp |
| Summit Bancshares |
QNB Corp and Summit Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QNB Corp and Summit Bancshares
The main advantage of trading using opposite QNB Corp and Summit Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QNB Corp position performs unexpectedly, Summit Bancshares 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 Summit Bancshares will offset losses from the drop in Summit Bancshares' long position.| QNB Corp vs. Invesco High Income | QNB Corp vs. Blackrock Muniholdings Ny | QNB Corp vs. MFS Investment Grade | QNB Corp vs. Federated Premier Municipal |
| Summit Bancshares vs. Standard Bank Group | Summit Bancshares vs. PSB Holdings | Summit Bancshares vs. United Overseas Bank | Summit Bancshares vs. Turkiye Garanti Bankasi |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |