Correlation Between Cornerstone Financial and US Bancorp
Can any of the company-specific risk be diversified away by investing in both Cornerstone Financial 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 Cornerstone Financial and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornerstone Financial and US Bancorp, you can compare the effects of market volatilities on Cornerstone Financial 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 Cornerstone Financial with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Financial and US Bancorp.
Diversification Opportunities for Cornerstone Financial and US Bancorp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cornerstone and USB-PH is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Financial and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp and Cornerstone Financial 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 Cornerstone Financial 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 Cornerstone Financial i.e., Cornerstone Financial and US Bancorp go up and down completely randomly.
Pair Corralation between Cornerstone Financial and US Bancorp
If you would invest 2,214 in US Bancorp on September 1, 2024 and sell it today you would earn a total of 94.00 from holding US Bancorp or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Cornerstone Financial vs. US Bancorp
Performance |
| Timeline |
| Cornerstone Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| US Bancorp |
Cornerstone Financial and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornerstone Financial and US Bancorp
The main advantage of trading using opposite Cornerstone Financial and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Financial 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.| Cornerstone Financial vs. Northfield Bancorp | Cornerstone Financial vs. Sierra Bancorp | Cornerstone Financial vs. Bogota Financial Corp | Cornerstone Financial vs. First Bancorp |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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