Correlation Between US Bancorp and Associated Banc
Can any of the company-specific risk be diversified away by investing in both US Bancorp and Associated Banc 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 Associated Banc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and Associated Banc Corp, you can compare the effects of market volatilities on US Bancorp and Associated Banc 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 Associated Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Associated Banc.
Diversification Opportunities for US Bancorp and Associated Banc
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USB-PP and Associated is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and Associated Banc Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Banc 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 Associated Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Banc Corp has no effect on the direction of US Bancorp i.e., US Bancorp and Associated Banc go up and down completely randomly.
Pair Corralation between US Bancorp and Associated Banc
Assuming the 90 days trading horizon US Bancorp is expected to generate 1.36 times less return on investment than Associated Banc. But when comparing it to its historical volatility, US Bancorp is 1.83 times less risky than Associated Banc. It trades about 0.11 of its potential returns per unit of risk. Associated Banc Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,929 in Associated Banc Corp on August 24, 2024 and sell it today you would earn a total of 183.00 from holding Associated Banc Corp or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Bancorp vs. Associated Banc Corp
Performance |
| Timeline |
| US Bancorp |
| Associated Banc Corp |
US Bancorp and Associated Banc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Associated Banc
The main advantage of trading using opposite US Bancorp and Associated Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, Associated Banc 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 Associated Banc will offset losses from the drop in Associated Banc's long position.| US Bancorp vs. Capital One Financial | US Bancorp vs. Capital One Financial | US Bancorp vs. Bank of America | US Bancorp vs. KeyCorp |
| Associated Banc vs. Truist Financial | Associated Banc vs. US Bancorp | Associated Banc vs. Truist Financial | Associated Banc vs. MetLife Preferred Stock |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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