Correlation Between QCR Holdings and Kenvue

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

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

Diversification Opportunities for QCR Holdings and Kenvue

-0.79

Correlation Coefficient

QCR Holdings  Kenvue

Pay attention - limited upside

The 3 months correlation between QCR and Kenvue is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding QCR Holdings and Kenvue Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenvue 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 Kenvue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenvue Inc has no effect on the direction of QCR Holdings i.e., QCR Holdings and Kenvue go up and down completely randomly.

Pair Corralation between QCR Holdings and Kenvue

Given the investment horizon of 90 days QCR Holdings is expected to under-perform the Kenvue. But the stock apears to be less risky and, when comparing its historical volatility, QCR Holdings is 1.21 times less risky than Kenvue. The stock trades about -0.13 of its potential returns per unit of risk. The Kenvue Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,132  in Kenvue Inc on December 27, 2024 and sell it today you would earn a total of  208.00  from holding Kenvue Inc or generate 9.76% 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.  Kenvue Inc

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.

Kenvue Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kenvue Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Kenvue may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with QCR Holdings and Kenvue

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

The idea behind QCR Holdings and Kenvue Inc 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..