Correlation Between Associated Banc and Associated Banc
Can any of the company-specific risk be diversified away by investing in both Associated Banc and Associated Banc 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 Associated Banc 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 Associated Banc Corp, you can compare the effects of market volatilities on Associated Banc and Associated Banc 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 Associated Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and Associated Banc.
Diversification Opportunities for Associated Banc and Associated Banc
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and Associated is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and Associated Banc Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Banc Corp 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 Associated Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Banc Corp has no effect on the direction of Associated Banc i.e., Associated Banc and Associated Banc go up and down completely randomly.
Pair Corralation between Associated Banc and Associated Banc
Assuming the 90 days trading horizon Associated Banc Corp is expected to under-perform the Associated Banc. But the preferred stock apears to be less risky and, when comparing its historical volatility, Associated Banc Corp is 1.2 times less risky than Associated Banc. The preferred stock trades about -0.11 of its potential returns per unit of risk. The Associated Banc Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,213 in Associated Banc Corp on November 18, 2024 and sell it today you would lose (25.00) from holding Associated Banc Corp or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Banc Corp vs. Associated Banc Corp
Performance |
| Timeline |
| Associated Banc Corp |
| Associated Banc Corp |
Associated Banc and Associated Banc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Banc and Associated Banc
The main advantage of trading using opposite Associated Banc and Associated Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Banc position performs unexpectedly, Associated Banc 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 Associated Banc will offset losses from the drop in Associated Banc's long position.| Associated Banc vs. Truist Financial | Associated Banc vs. Truist Financial | Associated Banc vs. US Bancorp | Associated Banc vs. MetLife Preferred Stock |
| Associated Banc vs. Andover Bancorp | Associated Banc vs. Aozora Bank Ltd | Associated Banc 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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