Correlation Between OtelloASA and US Bancorp
Can any of the company-specific risk be diversified away by investing in both OtelloASA 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 OtelloASA and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otello ASA and US Bancorp, you can compare the effects of market volatilities on OtelloASA 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 OtelloASA with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of OtelloASA and US Bancorp.
Diversification Opportunities for OtelloASA and US Bancorp
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between OtelloASA and UB5 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Otello ASA and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp and OtelloASA 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 Otello ASA 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 OtelloASA i.e., OtelloASA and US Bancorp go up and down completely randomly.
Pair Corralation between OtelloASA and US Bancorp
Assuming the 90 days horizon OtelloASA is expected to generate 3.5 times less return on investment than US Bancorp. But when comparing it to its historical volatility, Otello ASA is 1.89 times less risky than US Bancorp. It trades about 0.12 of its potential returns per unit of risk. US Bancorp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,480 in US Bancorp on August 28, 2024 and sell it today you would earn a total of 500.00 from holding US Bancorp or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Otello ASA vs. US Bancorp
Performance |
| Timeline |
| Otello ASA |
| US Bancorp |
OtelloASA and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OtelloASA and US Bancorp
The main advantage of trading using opposite OtelloASA and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OtelloASA 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.| OtelloASA vs. Superior Plus Corp | OtelloASA vs. NMI Holdings | OtelloASA vs. Origin Agritech | OtelloASA vs. SIVERS SEMICONDUCTORS AB |
| US Bancorp vs. Superior Plus Corp | US Bancorp vs. NMI Holdings | US Bancorp vs. Origin Agritech | US Bancorp vs. SIVERS SEMICONDUCTORS AB |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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