Correlation Between US Bancorp and Intel
Can any of the company-specific risk be diversified away by investing in both US Bancorp and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and Intel, you can compare the effects of market volatilities on US Bancorp and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Intel.
Diversification Opportunities for US Bancorp and Intel
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between USB and Intel is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of US Bancorp i.e., US Bancorp and Intel go up and down completely randomly.
Pair Corralation between US Bancorp and Intel
Considering the 90-day investment horizon US Bancorp is expected to generate 0.87 times more return on investment than Intel. However, US Bancorp is 1.15 times less risky than Intel. It trades about 0.05 of its potential returns per unit of risk. Intel is currently generating about 0.04 per unit of risk. If you would invest 3,112 in US Bancorp on January 19, 2024 and sell it today you would earn a total of 832.00 from holding US Bancorp or generate 26.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Bancorp vs. Intel
Performance |
| Timeline |
| US Bancorp |
| Intel |
US Bancorp and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Intel
The main advantage of trading using opposite US Bancorp and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| US Bancorp vs. PNC Financial Services | US Bancorp vs. KeyCorp | US Bancorp vs. Zions Bancorporation | US Bancorp vs. Fifth Third Bancorp |
| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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