Correlation Between SLM Corp and Associated Banc

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

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

Diversification Opportunities for SLM Corp and Associated Banc

0.08

Correlation Coefficient

SLM Corp  Associated Banc

Significant diversification

The 3 months correlation between SLM and Associated is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SLM Corp Pb and Associated Banc Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Banc Corp and SLM 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 SLM Corp Pb are associated (or correlated) with Associated Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Banc Corp has no effect on the direction of SLM Corp i.e., SLM Corp and Associated Banc go up and down completely randomly.

Pair Corralation between SLM Corp and Associated Banc

Assuming the 90 days horizon SLM Corp is expected to generate 2.67 times less return on investment than Associated Banc. In addition to that, SLM Corp is 1.12 times more volatile than Associated Banc Corp. It trades about 0.05 of its total potential returns per unit of risk. Associated Banc Corp is currently generating about 0.14 per unit of volatility. If you would invest  1,906  in Associated Banc Corp on May 2, 2025 and sell it today you would earn a total of  128.00  from holding Associated Banc Corp or generate 6.72% return on investment over 90 days.

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

SLM Corp Pb  vs.  Associated Banc Corp

SLM Corp Pb

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SLM Corp Pb are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, SLM Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Associated Banc Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Banc Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental drivers, Associated Banc may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SLM Corp and Associated Banc

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

The idea behind SLM Corp Pb and Associated Banc Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.