Correlation Between QNB Corp and Southeastern Banking

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

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

Diversification Opportunities for QNB Corp and Southeastern Banking

0.34

Correlation Coefficient

QNB Corp  Southeastern Banking

Weak diversification

The 3 months correlation between QNB and Southeastern is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding QNB Corp and Southeastern Banking Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southeastern Banking Corp 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 Southeastern Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southeastern Banking Corp has no effect on the direction of QNB Corp i.e., QNB Corp and Southeastern Banking go up and down completely randomly.

Pair Corralation between QNB Corp and Southeastern Banking

Given the investment horizon of 90 days QNB Corp is expected to generate 1.36 times less return on investment than Southeastern Banking. But when comparing it to its historical volatility, QNB Corp is 1.61 times less risky than Southeastern Banking. It trades about 0.05 of its potential returns per unit of risk. Southeastern Banking Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,318  in Southeastern Banking Corp on May 7, 2025 and sell it today you would earn a total of  72.00  from holding Southeastern Banking Corp or generate 3.11% return on investment over 90 days.

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

QNB Corp  vs.  Southeastern Banking Corp

QNB Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in QNB Corp are ranked lower than 4 (%) 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.

Southeastern Banking Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Southeastern Banking Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Southeastern Banking is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with QNB Corp and Southeastern Banking

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

The idea behind QNB Corp and Southeastern Banking 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.