Correlation Between Amada and US Bancorp
Can any of the company-specific risk be diversified away by investing in both Amada 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 Amada and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amada Co and US Bancorp PERP, you can compare the effects of market volatilities on Amada 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 Amada with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amada and US Bancorp.
Diversification Opportunities for Amada and US Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amada and USB-PA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amada Co 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 Amada 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 Amada Co 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 Amada i.e., Amada and US Bancorp go up and down completely randomly.
Pair Corralation between Amada and US Bancorp
If you would invest 83,654 in US Bancorp PERP on January 26, 2024 and sell it today you would earn a total of 4,346 from holding US Bancorp PERP or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Amada Co vs. US Bancorp PERP
Performance |
| Timeline |
| Amada |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| US Bancorp PERP |
Amada and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amada and US Bancorp
The main advantage of trading using opposite Amada and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amada 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 Amada Co 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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