Correlation Between Superior Plus and US Bancorp
Can any of the company-specific risk be diversified away by investing in both Superior Plus and US Bancorp 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 Superior Plus and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and US Bancorp, you can compare the effects of market volatilities on Superior Plus and US Bancorp 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 Superior Plus with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and US Bancorp.
Diversification Opportunities for Superior Plus and US Bancorp
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and UB5 is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp and Superior Plus 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 Superior Plus Corp are associated (or correlated) with US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of Superior Plus i.e., Superior Plus and US Bancorp go up and down completely randomly.
Pair Corralation between Superior Plus and US Bancorp
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the US Bancorp. In addition to that, Superior Plus is 2.26 times more volatile than US Bancorp. It trades about -0.04 of its total potential returns per unit of risk. US Bancorp is currently generating about 0.21 per unit of volatility. If you would invest 4,476 in US Bancorp on August 25, 2024 and sell it today you would earn a total of 465.00 from holding US Bancorp or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. US Bancorp
Performance |
| Timeline |
| Superior Plus Corp |
| US Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Superior Plus and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and US Bancorp
The main advantage of trading using opposite Superior Plus and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.| Superior Plus vs. Fast Retailing Co | Superior Plus vs. Auto Trader Group | Superior Plus vs. Monster Beverage Corp | Superior Plus vs. Suntory Beverage Food |
| US Bancorp vs. Entravision Communications | US Bancorp vs. CarsalesCom | US Bancorp vs. DiamondRock Hospitality | US Bancorp vs. Spirent Communications plc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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