Correlation Between Associated Banc and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both Associated Banc and Aozora Bank 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 Aozora Bank 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 Aozora Bank Ltd, you can compare the effects of market volatilities on Associated Banc and Aozora Bank 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 Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and Aozora Bank.
Diversification Opportunities for Associated Banc and Aozora Bank
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Aozora is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and Aozora Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank 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 Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of Associated Banc i.e., Associated Banc and Aozora Bank go up and down completely randomly.
Pair Corralation between Associated Banc and Aozora Bank
Assuming the 90 days trading horizon Associated Banc Corp is expected to generate 0.43 times more return on investment than Aozora Bank. However, Associated Banc Corp is 2.32 times less risky than Aozora Bank. It trades about 0.05 of its potential returns per unit of risk. Aozora Bank Ltd is currently generating about -0.04 per unit of risk. If you would invest 1,837 in Associated Banc Corp on November 9, 2024 and sell it today you would earn a total of 253.00 from holding Associated Banc Corp or generate 13.77% 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. Aozora Bank Ltd
Performance |
| Timeline |
| Associated Banc Corp |
| Aozora Bank |
Associated Banc and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Banc and Aozora Bank
The main advantage of trading using opposite Associated Banc and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Banc position performs unexpectedly, Aozora Bank 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.| Associated Banc vs. Associated Banc Corp | Associated Banc vs. Truist Financial | Associated Banc vs. Citizens Financial Group | Associated Banc vs. Webster Financial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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