Correlation Between Zions Bancorporation and Affiliated Managers

Can any of the company-specific risk be diversified away by investing in both Zions Bancorporation and Affiliated Managers 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 Zions Bancorporation and Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zions Bancorporation and Affiliated Managers Group, you can compare the effects of market volatilities on Zions Bancorporation and Affiliated Managers 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 Zions Bancorporation with a short position of Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zions Bancorporation and Affiliated Managers.

Diversification Opportunities for Zions Bancorporation and Affiliated Managers

0.96

Correlation Coefficient

Zions Bancorporation  Affiliated Managers

Almost no diversification

The 3 months correlation between Zions and Affiliated is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Zions Bancorp. and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and Zions Bancorporation 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 Zions Bancorporation are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Zions Bancorporation i.e., Zions Bancorporation and Affiliated Managers go up and down completely randomly.

Pair Corralation between Zions Bancorporation and Affiliated Managers

Given the investment horizon of 90 days Zions Bancorporation is expected to generate 1.21 times less return on investment than Affiliated Managers. In addition to that, Zions Bancorporation is 1.31 times more volatile than Affiliated Managers Group. It trades about 0.14 of its total potential returns per unit of risk. Affiliated Managers Group is currently generating about 0.22 per unit of volatility. If you would invest  17,258  in Affiliated Managers Group on May 6, 2025 and sell it today you would earn a total of  3,448  from holding Affiliated Managers Group or generate 19.98% return on investment over 90 days.

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

Zions Bancorp.  vs.  Affiliated Managers Group

Zions Bancorporation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zions Bancorporation are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Zions Bancorporation displayed solid returns over the last few months and may actually be approaching a breakup point.

Affiliated Managers

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Managers Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, Affiliated Managers reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zions Bancorporation and Affiliated Managers

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

The idea behind Zions Bancorporation and Affiliated Managers Group 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.