Correlation Between ConnectOne Bancorp and US Bancorp
Can any of the company-specific risk be diversified away by investing in both ConnectOne Bancorp 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 ConnectOne Bancorp and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConnectOne Bancorp and US Bancorp, you can compare the effects of market volatilities on ConnectOne Bancorp 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 ConnectOne Bancorp with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConnectOne Bancorp and US Bancorp.
Diversification Opportunities for ConnectOne Bancorp and US Bancorp
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between ConnectOne and USB-PS is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ConnectOne Bancorp and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp and ConnectOne Bancorp 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 ConnectOne Bancorp 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 ConnectOne Bancorp i.e., ConnectOne Bancorp and US Bancorp go up and down completely randomly.
Pair Corralation between ConnectOne Bancorp and US Bancorp
Assuming the 90 days horizon ConnectOne Bancorp is expected to generate 1.7 times more return on investment than US Bancorp. However, ConnectOne Bancorp is 1.7 times more volatile than US Bancorp. It trades about 0.03 of its potential returns per unit of risk. US Bancorp is currently generating about 0.04 per unit of risk. If you would invest 1,800 in ConnectOne Bancorp on September 3, 2024 and sell it today you would earn a total of 420.00 from holding ConnectOne Bancorp or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ConnectOne Bancorp vs. US Bancorp
Performance |
| Timeline |
| ConnectOne Bancorp |
| US Bancorp |
ConnectOne Bancorp and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConnectOne Bancorp and US Bancorp
The main advantage of trading using opposite ConnectOne Bancorp and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConnectOne Bancorp 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.| ConnectOne Bancorp vs. Dime Community Bancshares | ConnectOne Bancorp vs. Washington Federal | ConnectOne Bancorp vs. CNB Financial | ConnectOne Bancorp vs. First Guaranty Bancshares |
| US Bancorp vs. US Bancorp | US Bancorp vs. Bank of America | US Bancorp vs. US Bancorp | US Bancorp vs. JPMorgan Chase Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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