Correlation Between TrustCo Bank and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both TrustCo Bank 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 TrustCo Bank and Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TrustCo Bank Corp and Aozora Bank, you can compare the effects of market volatilities on TrustCo Bank 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 TrustCo Bank with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of TrustCo Bank and Aozora Bank.
Diversification Opportunities for TrustCo Bank and Aozora Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TrustCo and Aozora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TrustCo Bank Corp and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank and TrustCo Bank 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 TrustCo Bank 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 TrustCo Bank i.e., TrustCo Bank and Aozora Bank go up and down completely randomly.
Pair Corralation between TrustCo Bank and Aozora Bank
If you would invest 3,185 in TrustCo Bank Corp on December 4, 2024 and sell it today you would earn a total of 8.00 from holding TrustCo Bank Corp or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
TrustCo Bank Corp vs. Aozora Bank
Performance |
| Timeline |
| TrustCo Bank Corp |
| Aozora Bank |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
TrustCo Bank and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TrustCo Bank and Aozora Bank
The main advantage of trading using opposite TrustCo Bank and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrustCo Bank 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.| TrustCo Bank vs. Southern Missouri Bancorp | TrustCo Bank vs. IF Bancorp | TrustCo Bank vs. Colony Bankcorp | TrustCo Bank vs. Old Point Financial |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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