Correlation Between Chemung Financial and QCR Holdings
Can any of the company-specific risk be diversified away by investing in both Chemung Financial and QCR Holdings 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 Chemung Financial and QCR Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemung Financial Corp and QCR Holdings, you can compare the effects of market volatilities on Chemung Financial and QCR Holdings 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 Chemung Financial with a short position of QCR Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and QCR Holdings.
Diversification Opportunities for Chemung Financial and QCR Holdings
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chemung and QCR is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and QCR Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QCR Holdings and Chemung 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 Chemung Financial Corp are associated (or correlated) with QCR Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QCR Holdings has no effect on the direction of Chemung Financial i.e., Chemung Financial and QCR Holdings go up and down completely randomly.
Pair Corralation between Chemung Financial and QCR Holdings
Given the investment horizon of 90 days Chemung Financial is expected to generate 2.29 times less return on investment than QCR Holdings. But when comparing it to its historical volatility, Chemung Financial Corp is 1.43 times less risky than QCR Holdings. It trades about 0.07 of its potential returns per unit of risk. QCR Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,337 in QCR Holdings on September 2, 2024 and sell it today you would earn a total of 4,874 from holding QCR Holdings or generate 112.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemung Financial Corp vs. QCR Holdings
Performance |
| Timeline |
| Chemung Financial Corp |
| QCR Holdings |
Chemung Financial and QCR Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemung Financial and QCR Holdings
The main advantage of trading using opposite Chemung Financial and QCR Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemung Financial position performs unexpectedly, QCR Holdings 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 QCR Holdings will offset losses from the drop in QCR Holdings' long position.| Chemung Financial vs. Affinity Bancshares | Chemung Financial vs. Auburn National Bancorporation | Chemung Financial vs. BayCom Corp | Chemung Financial vs. Community West Bancshares |
| QCR Holdings vs. Community West Bancshares | QCR Holdings vs. First Financial Northwest | QCR Holdings vs. CF Bankshares | QCR Holdings vs. Home Federal Bancorp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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