Correlation Between Associated Banc and Cadence Bancorp

Can any of the company-specific risk be diversified away by investing in both Associated Banc and Cadence 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 Cadence 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 Cadence Bancorp, you can compare the effects of market volatilities on Associated Banc and Cadence 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 Cadence Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and Cadence Bancorp.

Diversification Opportunities for Associated Banc and Cadence Bancorp

0.74

Correlation Coefficient

Associated Banc  Cadence Bancorp

Poor diversification

The 3 months correlation between Associated and Cadence is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and Cadence Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence 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 Cadence Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Bancorp has no effect on the direction of Associated Banc i.e., Associated Banc and Cadence Bancorp go up and down completely randomly.

Pair Corralation between Associated Banc and Cadence Bancorp

Considering the 90-day investment horizon Associated Banc is expected to generate 2.98 times less return on investment than Cadence Bancorp. But when comparing it to its historical volatility, Associated Banc Corp is 1.1 times less risky than Cadence Bancorp. It trades about 0.03 of its potential returns per unit of risk. Cadence Bancorp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,447  in Cadence Bancorp on August 3, 2025 and sell it today you would earn a total of  327.00  from holding Cadence Bancorp or generate 9.49% 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.  Cadence Bancorp

Associated Banc Corp

Risk-Adjusted Performance

Weak

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

Cadence Bancorp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Cadence Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Cadence Bancorp may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Associated Banc and Cadence Bancorp

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

The idea behind Associated Banc Corp and Cadence 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.