Correlation Between Associated Banc and Ameris Bancorp

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

By analyzing existing cross correlation between Associated Banc Corp and Ameris Bancorp, you can compare the effects of market volatilities on Associated Banc and Ameris 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 Associated Banc with a short position of Ameris Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and Ameris Bancorp.

Diversification Opportunities for Associated Banc and Ameris Bancorp

0.64

Correlation Coefficient

Associated Banc  Ameris Bancorp

Poor diversification

The 3 months correlation between Associated and Ameris is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and Ameris Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameris Bancorp and Associated Banc 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 Associated Banc Corp are associated (or correlated) with Ameris Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameris Bancorp has no effect on the direction of Associated Banc i.e., Associated Banc and Ameris Bancorp go up and down completely randomly.

Pair Corralation between Associated Banc and Ameris Bancorp

Considering the 90-day investment horizon Associated Banc is expected to generate 1.01 times less return on investment than Ameris Bancorp. But when comparing it to its historical volatility, Associated Banc Corp is 1.08 times less risky than Ameris Bancorp. It trades about 0.12 of its potential returns per unit of risk. Ameris Bancorp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,640  in Ameris Bancorp on January 26, 2024 and sell it today you would earn a total of  185.00  from holding Ameris Bancorp or generate 3.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Associated Banc Corp  vs.  Ameris Bancorp

Associated Banc Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ameris Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ameris Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Associated Banc and Ameris Bancorp

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

The idea behind Associated Banc Corp and Ameris Bancorp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.