Correlation Between US Bancorp and CoBank ACB
Can any of the company-specific risk be diversified away by investing in both US Bancorp and CoBank ACB 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 CoBank ACB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and CoBank ACB, you can compare the effects of market volatilities on US Bancorp and CoBank ACB 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 CoBank ACB. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and CoBank ACB.
Diversification Opportunities for US Bancorp and CoBank ACB
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USB and CoBank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and CoBank ACB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoBank ACB 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 CoBank ACB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoBank ACB has no effect on the direction of US Bancorp i.e., US Bancorp and CoBank ACB go up and down completely randomly.
Pair Corralation between US Bancorp and CoBank ACB
If you would invest 2,924 in US Bancorp on January 19, 2024 and sell it today you would earn a total of 1,020 from holding US Bancorp or generate 34.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
US Bancorp vs. CoBank ACB
Performance |
| Timeline |
| US Bancorp |
| CoBank ACB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
US Bancorp and CoBank ACB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and CoBank ACB
The main advantage of trading using opposite US Bancorp and CoBank ACB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, CoBank ACB 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 CoBank ACB will offset losses from the drop in CoBank ACB's long position.| US Bancorp vs. PNC Financial Services | US Bancorp vs. KeyCorp | US Bancorp vs. Zions Bancorporation | US Bancorp vs. Fifth Third Bancorp |
| CoBank ACB vs. Compania Cervecerias Unidas | CoBank ACB vs. Willamette Valley Vineyards | CoBank ACB vs. Encore Wire | CoBank ACB vs. CECO Environmental Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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