Correlation Between US Bancorp and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both US Bancorp and Bangkok 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 US Bancorp and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and Bangkok Bank Public, you can compare the effects of market volatilities on US Bancorp and Bangkok 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 US Bancorp with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Bangkok Bank.
Diversification Opportunities for US Bancorp and Bangkok Bank
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USB-PH and Bangkok is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and Bangkok Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Bank Public and US 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 US Bancorp are associated (or correlated) with Bangkok Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Bank Public has no effect on the direction of US Bancorp i.e., US Bancorp and Bangkok Bank go up and down completely randomly.
Pair Corralation between US Bancorp and Bangkok Bank
Assuming the 90 days trading horizon US Bancorp is expected to generate 0.29 times more return on investment than Bangkok Bank. However, US Bancorp is 3.46 times less risky than Bangkok Bank. It trades about 0.06 of its potential returns per unit of risk. Bangkok Bank Public is currently generating about 0.01 per unit of risk. If you would invest 1,778 in US Bancorp on September 19, 2024 and sell it today you would earn a total of 478.00 from holding US Bancorp or generate 26.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.37% |
| Values | Daily Returns |
US Bancorp vs. Bangkok Bank Public
Performance |
| Timeline |
| US Bancorp |
| Bangkok Bank Public |
US Bancorp and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Bangkok Bank
The main advantage of trading using opposite US Bancorp and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, Bangkok 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 Bangkok Bank will offset losses from the drop in Bangkok Bank's long position.| US Bancorp vs. US Bancorp PERP | US Bancorp vs. KeyCorp | US Bancorp vs. KeyCorp | US Bancorp vs. Regions Financial |
| Bangkok Bank vs. Morningstar Unconstrained Allocation | Bangkok Bank vs. Bondbloxx ETF Trust | Bangkok Bank vs. Spring Valley Acquisition | Bangkok Bank vs. Bondbloxx ETF Trust |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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