Correlation Between QCR Holdings and Home Bancorp
Can any of the company-specific risk be diversified away by investing in both QCR Holdings and Home Bancorp 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 Home Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QCR Holdings and Home Bancorp, you can compare the effects of market volatilities on QCR Holdings and Home Bancorp 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 Home Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of QCR Holdings and Home Bancorp.
Diversification Opportunities for QCR Holdings and Home Bancorp
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QCR and Home is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding QCR Holdings and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Bancorp 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 Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of QCR Holdings i.e., QCR Holdings and Home Bancorp go up and down completely randomly.
Pair Corralation between QCR Holdings and Home Bancorp
Given the investment horizon of 90 days QCR Holdings is expected to generate 1.33 times more return on investment than Home Bancorp. However, QCR Holdings is 1.33 times more volatile than Home Bancorp. It trades about 0.22 of its potential returns per unit of risk. Home Bancorp is currently generating about 0.11 per unit of risk. If you would invest 8,109 in QCR Holdings on August 30, 2024 and sell it today you would earn a total of 1,242 from holding QCR Holdings or generate 15.32% 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. Home Bancorp
Performance |
| Timeline |
| QCR Holdings |
| Home Bancorp |
QCR Holdings and Home Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QCR Holdings and Home Bancorp
The main advantage of trading using opposite QCR Holdings and Home Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QCR Holdings position performs unexpectedly, Home Bancorp 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 Home Bancorp will offset losses from the drop in Home Bancorp'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 |
| Home Bancorp vs. Home Federal Bancorp | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. First Financial Northwest | Home Bancorp vs. First Capital |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |