Correlation Between US Bancorp and NYCB Old

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

By analyzing existing cross correlation between US Bancorp and NYCB Old, you can compare the effects of market volatilities on US Bancorp and NYCB Old 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 NYCB Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and NYCB Old.

Diversification Opportunities for US Bancorp and NYCB Old

0.0

Correlation Coefficient

US Bancorp  NYCB Old

Pay attention - limited upside

The 3 months correlation between USB and NYCB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and NYCB Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYCB Old 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 NYCB Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYCB Old has no effect on the direction of US Bancorp i.e., US Bancorp and NYCB Old go up and down completely randomly.

Pair Corralation between US Bancorp and NYCB Old

If you would invest (100.00) in NYCB Old on November 19, 2024 and sell it today you would earn a total of  100.00  from holding NYCB Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

US Bancorp  vs.  NYCB Old

US Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days US Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, US Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

NYCB Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NYCB Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, NYCB Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with US Bancorp and NYCB Old

The main advantage of trading using opposite US Bancorp and NYCB Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, NYCB Old 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 NYCB Old will offset losses from the drop in NYCB Old's long position.

The idea behind US Bancorp and NYCB Old 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.