Correlation Between Associated Banc and Tectonic Financial
Can any of the company-specific risk be diversified away by investing in both Associated Banc and Tectonic Financial 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 Associated Banc and Tectonic Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Banc Corp and Tectonic Financial PR, you can compare the effects of market volatilities on Associated Banc and Tectonic Financial 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 Associated Banc with a short position of Tectonic Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and Tectonic Financial.
Diversification Opportunities for Associated Banc and Tectonic Financial
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Tectonic is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and Tectonic Financial PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tectonic Financial and Associated Banc 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 Associated Banc Corp are associated (or correlated) with Tectonic Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tectonic Financial has no effect on the direction of Associated Banc i.e., Associated Banc and Tectonic Financial go up and down completely randomly.
Pair Corralation between Associated Banc and Tectonic Financial
Assuming the 90 days trading horizon Associated Banc Corp is expected to under-perform the Tectonic Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, Associated Banc Corp is 1.36 times less risky than Tectonic Financial. The preferred stock trades about -0.06 of its potential returns per unit of risk. The Tectonic Financial PR is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,015 in Tectonic Financial PR on August 27, 2024 and sell it today you would earn a total of 17.00 from holding Tectonic Financial PR or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Banc Corp vs. Tectonic Financial PR
Performance |
| Timeline |
| Associated Banc Corp |
| Tectonic Financial |
Associated Banc and Tectonic Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Banc and Tectonic Financial
The main advantage of trading using opposite Associated Banc and Tectonic Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Banc position performs unexpectedly, Tectonic Financial 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 Tectonic Financial will offset losses from the drop in Tectonic Financial's long position.| Associated Banc vs. Andover Bancorp | Associated Banc vs. Aozora Bank Ltd | Associated Banc vs. Absa Group Limited |
| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Absa Group Limited |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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