Correlation Between Provident Financial and QC Holdings
Can any of the company-specific risk be diversified away by investing in both Provident Financial and QC 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 Provident Financial and QC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provident Financial Holdings and QC Holdings, you can compare the effects of market volatilities on Provident Financial and QC 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 Provident Financial with a short position of QC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provident Financial and QC Holdings.
Diversification Opportunities for Provident Financial and QC Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Provident and QCCO is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Provident Financial Holdings and QC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QC Holdings and Provident 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 Provident Financial Holdings are associated (or correlated) with QC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QC Holdings has no effect on the direction of Provident Financial i.e., Provident Financial and QC Holdings go up and down completely randomly.
Pair Corralation between Provident Financial and QC Holdings
If you would invest 1,571 in Provident Financial Holdings on August 31, 2024 and sell it today you would earn a total of 24.00 from holding Provident Financial Holdings or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Provident Financial Holdings vs. QC Holdings
Performance |
| Timeline |
| Provident Financial |
| QC Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Provident Financial and QC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provident Financial and QC Holdings
The main advantage of trading using opposite Provident Financial and QC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provident Financial position performs unexpectedly, QC 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 QC Holdings will offset losses from the drop in QC Holdings' long position.| Provident Financial vs. Home Federal Bancorp | Provident Financial vs. Magyar Bancorp | Provident Financial vs. Community West Bancshares | Provident Financial vs. First Northwest Bancorp |
| QC Holdings vs. Provident Financial Holdings | QC Holdings vs. QCR Holdings | QC Holdings vs. FirstCash | QC Holdings vs. Penns Woods 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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