Correlation Between QCR Holdings and Old Second
Can any of the company-specific risk be diversified away by investing in both QCR Holdings and Old Second 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 Old Second into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QCR Holdings and Old Second Bancorp, you can compare the effects of market volatilities on QCR Holdings and Old Second 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 Old Second. Check out your portfolio center. Please also check ongoing floating volatility patterns of QCR Holdings and Old Second.
Diversification Opportunities for QCR Holdings and Old Second
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between QCR and Old is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding QCR Holdings and Old Second Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Second 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 Old Second. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Second Bancorp has no effect on the direction of QCR Holdings i.e., QCR Holdings and Old Second go up and down completely randomly.
Pair Corralation between QCR Holdings and Old Second
Given the investment horizon of 90 days QCR Holdings is expected to generate 1.15 times more return on investment than Old Second. However, QCR Holdings is 1.15 times more volatile than Old Second Bancorp. It trades about 0.12 of its potential returns per unit of risk. Old Second Bancorp is currently generating about 0.06 per unit of risk. If you would invest 5,315 in QCR Holdings on August 29, 2024 and sell it today you would earn a total of 4,069 from holding QCR Holdings or generate 76.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
QCR Holdings vs. Old Second Bancorp
Performance |
| Timeline |
| QCR Holdings |
| Old Second Bancorp |
QCR Holdings and Old Second Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QCR Holdings and Old Second
The main advantage of trading using opposite QCR Holdings and Old Second positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QCR Holdings position performs unexpectedly, Old Second 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 Old Second will offset losses from the drop in Old Second'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 |
| Old Second vs. Ohio Valley Banc | Old Second vs. Peoples Bancorp | Old Second vs. OceanFirst Financial Corp | Old Second vs. QCR Holdings |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |