Correlation Between AirIQ and US Bancorp
Can any of the company-specific risk be diversified away by investing in both AirIQ 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 AirIQ and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AirIQ Inc and US Bancorp PERP, you can compare the effects of market volatilities on AirIQ 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 AirIQ with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AirIQ and US Bancorp.
Diversification Opportunities for AirIQ and US Bancorp
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AirIQ and USB-PA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding AirIQ Inc 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 AirIQ 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 AirIQ Inc 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 AirIQ i.e., AirIQ and US Bancorp go up and down completely randomly.
Pair Corralation between AirIQ and US Bancorp
Assuming the 90 days horizon AirIQ Inc is expected to generate 10.44 times more return on investment than US Bancorp. However, AirIQ is 10.44 times more volatile than US Bancorp PERP. It trades about 0.03 of its potential returns per unit of risk. US Bancorp PERP is currently generating about 0.02 per unit of risk. If you would invest 32.00 in AirIQ Inc on January 20, 2024 and sell it today you would lose (2.00) from holding AirIQ Inc or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AirIQ Inc vs. US Bancorp PERP
Performance |
| Timeline |
| AirIQ Inc |
| US Bancorp PERP |
AirIQ and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AirIQ and US Bancorp
The main advantage of trading using opposite AirIQ and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AirIQ 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.| AirIQ vs. Greenshift Corp | AirIQ vs. Next Hydrogen Solutions | AirIQ vs. Quality Industrial Corp | AirIQ vs. Weir Group PLC |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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