Correlation Between Associated Banc and Associated Banc

Can any of the company-specific risk be diversified away by investing in both Associated Banc 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 Associated Banc and Associated Banc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Associated Banc Corp and Associated Banc Corp, you can compare the effects of market volatilities on Associated Banc 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 Associated Banc with a short position of Associated Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and Associated Banc.

Diversification Opportunities for Associated Banc and Associated Banc

0.87

Correlation Coefficient

Associated Banc  Associated Banc

Very poor diversification

The 3 months correlation between Associated and Associated is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp 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 Associated Banc 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 Associated Banc Corp 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 Associated Banc i.e., Associated Banc and Associated Banc go up and down completely randomly.

Pair Corralation between Associated Banc and Associated Banc

Assuming the 90 days trading horizon Associated Banc Corp is expected to generate 1.13 times more return on investment than Associated Banc. However, Associated Banc is 1.13 times more volatile than Associated Banc Corp. It trades about 0.04 of its potential returns per unit of risk. Associated Banc Corp is currently generating about 0.02 per unit of risk. If you would invest  2,074  in Associated Banc Corp on December 27, 2024 and sell it today you would earn a total of  42.00  from holding Associated Banc Corp or generate 2.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Associated Banc Corp  vs.  Associated Banc Corp

Associated Banc Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Banc Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Associated Banc is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Associated Banc Corp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Banc Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, Associated Banc is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Associated Banc and Associated Banc

The main advantage of trading using opposite Associated Banc and Associated Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Banc 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.

The idea behind Associated Banc Corp and Associated Banc Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.