Correlation Between QNB Finans and Galatasaray Sportif

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Can any of the company-specific risk be diversified away by investing in both QNB Finans and Galatasaray Sportif 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 Galatasaray Sportif 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 Galatasaray Sportif Sinai, you can compare the effects of market volatilities on QNB Finans and Galatasaray Sportif 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 Galatasaray Sportif. Check out your portfolio center. Please also check ongoing floating volatility patterns of QNB Finans and Galatasaray Sportif.

Diversification Opportunities for QNB Finans and Galatasaray Sportif

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between QNB and Galatasaray is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding QNB Finans Finansal and Galatasaray Sportif Sinai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galatasaray Sportif Sinai 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 Galatasaray Sportif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galatasaray Sportif Sinai has no effect on the direction of QNB Finans i.e., QNB Finans and Galatasaray Sportif go up and down completely randomly.

Pair Corralation between QNB Finans and Galatasaray Sportif

Assuming the 90 days trading horizon QNB Finans Finansal is expected to generate 1.72 times more return on investment than Galatasaray Sportif. However, QNB Finans is 1.72 times more volatile than Galatasaray Sportif Sinai. It trades about 0.13 of its potential returns per unit of risk. Galatasaray Sportif Sinai is currently generating about 0.06 per unit of risk. If you would invest  969.00  in QNB Finans Finansal on August 31, 2024 and sell it today you would earn a total of  8,176  from holding QNB Finans Finansal or generate 843.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.73%
ValuesDaily Returns

QNB Finans Finansal  vs.  Galatasaray Sportif Sinai

 Performance 
       Timeline  
QNB Finans Finansal 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days QNB Finans Finansal 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.
Galatasaray Sportif Sinai 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Galatasaray Sportif Sinai has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Galatasaray Sportif is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

QNB Finans and Galatasaray Sportif Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with QNB Finans and Galatasaray Sportif

The main advantage of trading using opposite QNB Finans and Galatasaray Sportif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QNB Finans position performs unexpectedly, Galatasaray Sportif 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 Galatasaray Sportif will offset losses from the drop in Galatasaray Sportif's long position.
The idea behind QNB Finans Finansal and Galatasaray Sportif Sinai 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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