Correlation Between US Bancorp and South Atlantic
Can any of the company-specific risk be diversified away by investing in both US Bancorp and South Atlantic 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 South Atlantic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and South Atlantic Bancshares, you can compare the effects of market volatilities on US Bancorp and South Atlantic 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 South Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and South Atlantic.
Diversification Opportunities for US Bancorp and South Atlantic
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USB-PH and South is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and South Atlantic Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Atlantic Bancshares 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 South Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Atlantic Bancshares has no effect on the direction of US Bancorp i.e., US Bancorp and South Atlantic go up and down completely randomly.
Pair Corralation between US Bancorp and South Atlantic
Assuming the 90 days trading horizon US Bancorp is expected to generate 0.64 times more return on investment than South Atlantic. However, US Bancorp is 1.57 times less risky than South Atlantic. It trades about 0.1 of its potential returns per unit of risk. South Atlantic Bancshares is currently generating about -0.18 per unit of risk. If you would invest 2,248 in US Bancorp on December 5, 2024 and sell it today you would earn a total of 55.00 from holding US Bancorp or generate 2.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
US Bancorp vs. South Atlantic Bancshares
Performance |
Timeline |
US Bancorp |
South Atlantic Bancshares |
US Bancorp and South Atlantic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with US Bancorp and South Atlantic
The main advantage of trading using opposite US Bancorp and South Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, South Atlantic 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 South Atlantic will offset losses from the drop in South Atlantic's long position.US Bancorp vs. US Bancorp PERP | US Bancorp vs. KeyCorp | US Bancorp vs. KeyCorp | US Bancorp vs. Regions Financial |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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