Correlation Between Bms Birlesik and QNB Finans

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

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

Diversification Opportunities for Bms Birlesik and QNB Finans

-0.77

Correlation Coefficient

Bms Birlesik  QNB Finans

Pay attention - limited upside

The 3 months correlation between Bms and QNB is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bms Birlesik Metal 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 Bms Birlesik 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 Bms Birlesik Metal 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 Bms Birlesik i.e., Bms Birlesik and QNB Finans go up and down completely randomly.

Pair Corralation between Bms Birlesik and QNB Finans

Assuming the 90 days trading horizon Bms Birlesik Metal is expected to generate 0.38 times more return on investment than QNB Finans. However, Bms Birlesik Metal is 2.65 times less risky than QNB Finans. It trades about 0.16 of its potential returns per unit of risk. QNB Finans Finansal is currently generating about -0.15 per unit of risk. If you would invest  2,333  in Bms Birlesik Metal on September 14, 2024 and sell it today you would earn a total of  645.00  from holding Bms Birlesik Metal or generate 27.65% return on investment over 90 days.

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

Bms Birlesik Metal  vs.  QNB Finans Finansal

Bms Birlesik Metal

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bms Birlesik Metal are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bms Birlesik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

QNB Finans Finansal

Risk-Adjusted Performance

0 of 100

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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Bms Birlesik and QNB Finans

The main advantage of trading using opposite Bms Birlesik and QNB Finans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bms Birlesik 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 Bms Birlesik Metal 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.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.