Correlation Between Akebono Brake and US Bancorp
Can any of the company-specific risk be diversified away by investing in both Akebono Brake and US Bancorp 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 Akebono Brake and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akebono Brake Industry and US Bancorp PERP, you can compare the effects of market volatilities on Akebono Brake and US Bancorp 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 Akebono Brake with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akebono Brake and US Bancorp.
Diversification Opportunities for Akebono Brake and US Bancorp
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akebono and USB-PA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Akebono Brake Industry and US Bancorp PERP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp PERP and Akebono Brake 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 Akebono Brake Industry are associated (or correlated) with US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp PERP has no effect on the direction of Akebono Brake i.e., Akebono Brake and US Bancorp go up and down completely randomly.
Pair Corralation between Akebono Brake and US Bancorp
If you would invest 87,032 in US Bancorp PERP on January 20, 2024 and sell it today you would earn a total of 368.00 from holding US Bancorp PERP or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akebono Brake Industry vs. US Bancorp PERP
Performance |
| Timeline |
| Akebono Brake Industry |
| US Bancorp PERP |
Akebono Brake and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akebono Brake and US Bancorp
The main advantage of trading using opposite Akebono Brake and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akebono Brake position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.The idea behind Akebono Brake Industry and US Bancorp PERP 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.| US Bancorp vs. KeyCorp | US Bancorp vs. Regions Financial | US Bancorp vs. US Bancorp | US Bancorp vs. KeyCorp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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