Correlation Between Century Financial and QNB Corp

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

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

Diversification Opportunities for Century Financial and QNB Corp

0.06

Correlation Coefficient

Century Financial  QNB Corp

Significant diversification

The 3 months correlation between Century and QNB is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Century Financial Corp and QNB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QNB Corp and Century Financial 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 Century Financial Corp are associated (or correlated) with QNB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QNB Corp has no effect on the direction of Century Financial i.e., Century Financial and QNB Corp go up and down completely randomly.

Pair Corralation between Century Financial and QNB Corp

Given the investment horizon of 90 days Century Financial Corp is expected to generate 1.91 times more return on investment than QNB Corp. However, Century Financial is 1.91 times more volatile than QNB Corp. It trades about 0.04 of its potential returns per unit of risk. QNB Corp is currently generating about 0.07 per unit of risk. If you would invest  4,245  in Century Financial Corp on May 6, 2025 and sell it today you would earn a total of  155.00  from holding Century Financial Corp or generate 3.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Century Financial Corp  vs.  QNB Corp

Century Financial Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Century Financial Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Century Financial is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

QNB Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in QNB Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, QNB Corp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Century Financial and QNB Corp

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

The idea behind Century Financial Corp and QNB Corp 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.