Correlation Between Tekfen Holding and QNB Finans

Can any of the company-specific risk be diversified away by investing in both Tekfen Holding and QNB Finans 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 Tekfen Holding and QNB Finans into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tekfen Holding AS and QNB Finans Finansal, you can compare the effects of market volatilities on Tekfen Holding and QNB Finans 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 Tekfen Holding with a short position of QNB Finans. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekfen Holding and QNB Finans.

Diversification Opportunities for Tekfen Holding and QNB Finans

-0.59

Correlation Coefficient

Tekfen Holding  QNB Finans

Excellent diversification

The 3 months correlation between Tekfen and QNB is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tekfen Holding AS and QNB Finans Finansal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QNB Finans Finansal and Tekfen 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 Tekfen Holding AS are associated (or correlated) with QNB Finans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QNB Finans Finansal has no effect on the direction of Tekfen Holding i.e., Tekfen Holding and QNB Finans go up and down completely randomly.

Pair Corralation between Tekfen Holding and QNB Finans

Assuming the 90 days trading horizon Tekfen Holding AS is expected to generate 0.81 times more return on investment than QNB Finans. However, Tekfen Holding AS is 1.24 times less risky than QNB Finans. It trades about 0.36 of its potential returns per unit of risk. QNB Finans Finansal is currently generating about -0.18 per unit of risk. If you would invest  3,960  in Tekfen Holding AS on January 30, 2024 and sell it today you would earn a total of  920.00  from holding Tekfen Holding AS or generate 23.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tekfen Holding AS  vs.  QNB Finans Finansal

Tekfen Holding AS

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tekfen Holding AS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Tekfen Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

QNB Finans Finansal

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in QNB Finans Finansal are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, QNB Finans demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tekfen Holding and QNB Finans

The main advantage of trading using opposite Tekfen Holding and QNB Finans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekfen Holding position performs unexpectedly, QNB Finans 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 Finans will offset losses from the drop in QNB Finans' long position.

The idea behind Tekfen Holding AS and QNB Finans Finansal 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.