Correlation Between QCR Holdings and Wendys
Can any of the company-specific risk be diversified away by investing in both QCR Holdings and Wendys 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 Wendys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QCR Holdings and The Wendys Co, you can compare the effects of market volatilities on QCR Holdings and Wendys 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 Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of QCR Holdings and Wendys.
Diversification Opportunities for QCR Holdings and Wendys
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QCR and Wendys is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding QCR Holdings and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys 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 Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of QCR Holdings i.e., QCR Holdings and Wendys go up and down completely randomly.
Pair Corralation between QCR Holdings and Wendys
Given the investment horizon of 90 days QCR Holdings is expected to generate 1.22 times more return on investment than Wendys. However, QCR Holdings is 1.22 times more volatile than The Wendys Co. It trades about 0.19 of its potential returns per unit of risk. The Wendys Co is currently generating about 0.05 per unit of risk. If you would invest 5,607 in QCR Holdings on September 3, 2024 and sell it today you would earn a total of 3,604 from holding QCR Holdings or generate 64.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QCR Holdings vs. The Wendys Co
Performance |
| Timeline |
| QCR Holdings |
| The Wendys |
QCR Holdings and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QCR Holdings and Wendys
The main advantage of trading using opposite QCR Holdings and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QCR Holdings position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' 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 |
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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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