Correlation Between QCR Holdings and OceanFirst Financial
Can any of the company-specific risk be diversified away by investing in both QCR Holdings and OceanFirst 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 QCR Holdings and OceanFirst Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QCR Holdings and OceanFirst Financial Corp, you can compare the effects of market volatilities on QCR Holdings and OceanFirst 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 QCR Holdings with a short position of OceanFirst Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of QCR Holdings and OceanFirst Financial.
Diversification Opportunities for QCR Holdings and OceanFirst Financial
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QCR and OceanFirst is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding QCR Holdings and OceanFirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanFirst Financial Corp 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 OceanFirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanFirst Financial Corp has no effect on the direction of QCR Holdings i.e., QCR Holdings and OceanFirst Financial go up and down completely randomly.
Pair Corralation between QCR Holdings and OceanFirst Financial
Given the investment horizon of 90 days QCR Holdings is expected to generate 1.14 times less return on investment than OceanFirst Financial. But when comparing it to its historical volatility, QCR Holdings is 1.33 times less risky than OceanFirst Financial. It trades about 0.22 of its potential returns per unit of risk. OceanFirst Financial Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,810 in OceanFirst Financial Corp on August 29, 2024 and sell it today you would earn a total of 305.00 from holding OceanFirst Financial Corp or generate 16.85% 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. OceanFirst Financial Corp
Performance |
| Timeline |
| QCR Holdings |
| OceanFirst Financial Corp |
QCR Holdings and OceanFirst Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QCR Holdings and OceanFirst Financial
The main advantage of trading using opposite QCR Holdings and OceanFirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QCR Holdings position performs unexpectedly, OceanFirst 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 OceanFirst Financial will offset losses from the drop in OceanFirst Financial'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 |
| OceanFirst Financial vs. Flushing Financial | OceanFirst Financial vs. Dime Community Bancshares | OceanFirst Financial vs. Peapack Gladstone Financial | OceanFirst Financial vs. Heritage Financial |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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