Correlation Between QCR Holdings and Capital One
Can any of the company-specific risk be diversified away by investing in both QCR Holdings and Capital One 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 QCR Holdings and Capital One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QCR Holdings and Capital One Financial, you can compare the effects of market volatilities on QCR Holdings and Capital One 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 QCR Holdings with a short position of Capital One. Check out your portfolio center. Please also check ongoing floating volatility patterns of QCR Holdings and Capital One.
Diversification Opportunities for QCR Holdings and Capital One
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QCR and Capital is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding QCR Holdings and Capital One Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital One Financial and QCR Holdings 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 QCR Holdings are associated (or correlated) with Capital One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital One Financial has no effect on the direction of QCR Holdings i.e., QCR Holdings and Capital One go up and down completely randomly.
Pair Corralation between QCR Holdings and Capital One
Given the investment horizon of 90 days QCR Holdings is expected to generate 0.97 times more return on investment than Capital One. However, QCR Holdings is 1.03 times less risky than Capital One. It trades about 0.16 of its potential returns per unit of risk. Capital One Financial is currently generating about 0.11 per unit of risk. If you would invest 5,783 in QCR Holdings on September 3, 2024 and sell it today you would earn a total of 3,428 from holding QCR Holdings or generate 59.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
QCR Holdings vs. Capital One Financial
Performance |
| Timeline |
| QCR Holdings |
| Capital One Financial |
QCR Holdings and Capital One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QCR Holdings and Capital One
The main advantage of trading using opposite QCR Holdings and Capital One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QCR Holdings position performs unexpectedly, Capital One 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 Capital One will offset losses from the drop in Capital One's long position.| QCR Holdings vs. Community West Bancshares | QCR Holdings vs. First Financial Northwest | QCR Holdings vs. CF Bankshares | QCR Holdings vs. Home Federal Bancorp |
| Capital One vs. Highway Holdings Limited | Capital One vs. QCR Holdings | Capital One vs. Partner Communications | Capital One vs. Acumen Pharmaceuticals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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