Correlation Between US Bancorp and Hancock Whitney
Can any of the company-specific risk be diversified away by investing in both US Bancorp and Hancock Whitney 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 Hancock Whitney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and Hancock Whitney Corp, you can compare the effects of market volatilities on US Bancorp and Hancock Whitney 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 Hancock Whitney. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Hancock Whitney.
Diversification Opportunities for US Bancorp and Hancock Whitney
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USB-PS and Hancock is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and Hancock Whitney Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney 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 Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney Corp has no effect on the direction of US Bancorp i.e., US Bancorp and Hancock Whitney go up and down completely randomly.
Pair Corralation between US Bancorp and Hancock Whitney
Assuming the 90 days trading horizon US Bancorp is expected to under-perform the Hancock Whitney. But the preferred stock apears to be less risky and, when comparing its historical volatility, US Bancorp is 3.85 times less risky than Hancock Whitney. The preferred stock trades about -0.09 of its potential returns per unit of risk. The Hancock Whitney Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5,139 in Hancock Whitney Corp on September 4, 2024 and sell it today you would earn a total of 813.00 from holding Hancock Whitney Corp or generate 15.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Bancorp vs. Hancock Whitney Corp
Performance |
| Timeline |
| US Bancorp |
| Hancock Whitney Corp |
US Bancorp and Hancock Whitney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Hancock Whitney
The main advantage of trading using opposite US Bancorp and Hancock Whitney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, Hancock Whitney 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 Hancock Whitney will offset losses from the drop in Hancock Whitney's long position.| US Bancorp vs. Truist Financial | US Bancorp vs. Truist Financial | US Bancorp vs. US Bancorp | US Bancorp vs. US Bancorp |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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