Correlation Between QCR Holdings and Orix Corp

Can any of the company-specific risk be diversified away by investing in both QCR Holdings and Orix Corp 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 Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between QCR Holdings and Orix Corp Ads, you can compare the effects of market volatilities on QCR Holdings and Orix Corp 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 Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of QCR Holdings and Orix Corp.

Diversification Opportunities for QCR Holdings and Orix Corp

-0.05

Correlation Coefficient

QCR Holdings  Orix Corp

Good diversification

The 3 months correlation between QCR and Orix is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding QCR Holdings and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads 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 Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of QCR Holdings i.e., QCR Holdings and Orix Corp go up and down completely randomly.

Pair Corralation between QCR Holdings and Orix Corp

Given the investment horizon of 90 days QCR Holdings is expected to under-perform the Orix Corp. But the stock apears to be less risky and, when comparing its historical volatility, QCR Holdings is 1.13 times less risky than Orix Corp. The stock trades about -0.16 of its potential returns per unit of risk. The Orix Corp Ads is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,131  in Orix Corp Ads on December 25, 2024 and sell it today you would earn a total of  41.00  from holding Orix Corp Ads or generate 1.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

QCR Holdings  vs.  Orix Corp Ads

QCR Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days QCR Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Orix Corp Ads

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orix Corp Ads are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Orix Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with QCR Holdings and Orix Corp

The main advantage of trading using opposite QCR Holdings and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QCR Holdings position performs unexpectedly, Orix Corp 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 Orix Corp will offset losses from the drop in Orix Corp's long position.

The idea behind QCR Holdings and Orix Corp Ads pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.