Correlation Between QNB Corp and Woodlands Financial

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

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

Diversification Opportunities for QNB Corp and Woodlands Financial

0.02

Correlation Coefficient

QNB Corp  Woodlands Financial

Significant diversification

The 3 months correlation between QNB and Woodlands is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding QNB Corp and Woodlands Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodlands Financial 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 Woodlands Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodlands Financial has no effect on the direction of QNB Corp i.e., QNB Corp and Woodlands Financial go up and down completely randomly.

Pair Corralation between QNB Corp and Woodlands Financial

Given the investment horizon of 90 days QNB Corp is expected to generate 0.46 times more return on investment than Woodlands Financial. However, QNB Corp is 2.16 times less risky than Woodlands Financial. It trades about 0.05 of its potential returns per unit of risk. Woodlands Financial Services is currently generating about 0.02 per unit of risk. If you would invest  3,391  in QNB Corp on May 7, 2025 and sell it today you would earn a total of  84.00  from holding QNB Corp or generate 2.48% return on investment over 90 days.

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

QNB Corp  vs.  Woodlands Financial Services

QNB Corp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in QNB Corp are ranked lower than 3 (%) 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.

Woodlands Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Woodlands Financial Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Woodlands Financial is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with QNB Corp and Woodlands Financial

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

The idea behind QNB Corp and Woodlands Financial Services 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.