Correlation Between US Bancorp and Wintrust Financial
Can any of the company-specific risk be diversified away by investing in both US Bancorp and Wintrust Financial 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 Wintrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and Wintrust Financial Corp, you can compare the effects of market volatilities on US Bancorp and Wintrust Financial 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 Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Wintrust Financial.
Diversification Opportunities for US Bancorp and Wintrust Financial
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between USB-PH and Wintrust is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and Wintrust Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintrust Financial Corp 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 Wintrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintrust Financial Corp has no effect on the direction of US Bancorp i.e., US Bancorp and Wintrust Financial go up and down completely randomly.
Pair Corralation between US Bancorp and Wintrust Financial
Assuming the 90 days trading horizon US Bancorp is expected to generate 5.19 times more return on investment than Wintrust Financial. However, US Bancorp is 5.19 times more volatile than Wintrust Financial Corp. It trades about 0.1 of its potential returns per unit of risk. Wintrust Financial Corp is currently generating about 0.26 per unit of risk. If you would invest 2,280 in US Bancorp on November 29, 2024 and sell it today you would earn a total of 22.00 from holding US Bancorp or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Bancorp vs. Wintrust Financial Corp
Performance |
| Timeline |
| US Bancorp |
| Wintrust Financial Corp |
US Bancorp and Wintrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Wintrust Financial
The main advantage of trading using opposite US Bancorp and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, Wintrust Financial 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 Wintrust Financial will offset losses from the drop in Wintrust Financial's long position.| US Bancorp vs. US Bancorp PERP | US Bancorp vs. KeyCorp | US Bancorp vs. KeyCorp | US Bancorp vs. Regions Financial |
| Wintrust Financial vs. Wintrust Financial Corp | Wintrust Financial vs. WesBanco | Wintrust Financial vs. Pinnacle Financial Partners |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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