Correlation Between Inbankshares Corp and US Bancorp

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

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

Diversification Opportunities for Inbankshares Corp and US Bancorp

-0.25
  Correlation Coefficient
Inbankshares Corp
US Bancorp

Very good diversification

The 3 months correlation between Inbankshares and US Bancorp is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inbankshares Corp and US Bancorp in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp and Inbankshares Corp 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 Inbankshares Corp 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 has no effect on the direction of Inbankshares Corp i.e., Inbankshares Corp and US Bancorp go up and down completely randomly.

Pair Corralation between Inbankshares Corp and US Bancorp

Given the investment horizon of 90 days Inbankshares Corp is expected to under-perform the US Bancorp. In addition to that, Inbankshares Corp is 1.43 times more volatile than US Bancorp. It trades about -0.03 of its total potential returns per unit of risk. US Bancorp is currently generating about 0.04 per unit of volatility. If you would invest  5,574  in US Bancorp on September 1, 2021 and sell it today you would earn a total of  166.00  from holding US Bancorp or generate 2.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.41%
ValuesDaily Returns

Inbankshares Corp  vs.  US Bancorp

 Performance (%) 
      Timeline 
Inbankshares Corp 
Inbankshares Performance
0 of 100
Over the last 90 days Inbankshares Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Inbankshares Corp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Inbankshares Price Channel

US Bancorp 
US Bancorp Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in US Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, US Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

US Bancorp Price Channel

Inbankshares Corp and US Bancorp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Inbankshares Corp and US Bancorp

The main advantage of trading using opposite Inbankshares Corp and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inbankshares Corp 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 Inbankshares Corp and US 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.

US Bancorp

Pair trading matchups for US Bancorp

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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