Correlation Between QCR Holdings and Amgen
Can any of the company-specific risk be diversified away by investing in both QCR Holdings and Amgen 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 Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QCR Holdings and Amgen Inc, you can compare the effects of market volatilities on QCR Holdings and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of QCR Holdings and Amgen.
Diversification Opportunities for QCR Holdings and Amgen
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between QCR and Amgen is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding QCR Holdings and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of QCR Holdings i.e., QCR Holdings and Amgen go up and down completely randomly.
Pair Corralation between QCR Holdings and Amgen
Given the investment horizon of 90 days QCR Holdings is expected to under-perform the Amgen. But the stock apears to be less risky and, when comparing its historical volatility, QCR Holdings is 1.23 times less risky than Amgen. The stock trades about -0.15 of its potential returns per unit of risk. The Amgen Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 26,107 in Amgen Inc on December 26, 2024 and sell it today you would earn a total of 4,464 from holding Amgen Inc or generate 17.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
QCR Holdings vs. Amgen Inc
Performance |
Timeline |
QCR Holdings |
Amgen Inc |
QCR Holdings and Amgen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with QCR Holdings and Amgen
The main advantage of trading using opposite QCR Holdings and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QCR Holdings position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen'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 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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