Correlation Between Bancfirst Corp and US Bancorp

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Can any of the company-specific risk be diversified away by investing in both Bancfirst 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 Bancfirst Corp and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bancfirst Corp and US Bancorp, you can compare the effects of market volatilities on Bancfirst 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 Bancfirst Corp with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancfirst Corp and US Bancorp.

Diversification Opportunities for Bancfirst Corp and US Bancorp

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bancfirst and US Bancorp is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bancfirst Corp and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp and Bancfirst 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 Bancfirst 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 Bancfirst Corp i.e., Bancfirst Corp and US Bancorp go up and down completely randomly.

Pair Corralation between Bancfirst Corp and US Bancorp

Given the investment horizon of 90 days Bancfirst Corp is expected to under-perform the US Bancorp. In addition to that, Bancfirst Corp is 1.12 times more volatile than US Bancorp. It trades about -0.4 of its total potential returns per unit of risk. US Bancorp is currently generating about -0.33 per unit of volatility. If you would invest  4,587  in US Bancorp on July 3, 2022 and sell it today you would lose (555.00)  from holding US Bancorp or give up 12.1% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bancfirst Corp  vs.  US Bancorp

 Performance (%) 
       Timeline  
Bancfirst Corp 
Bancfirst Performance
0 of 100
Over the last 90 days Bancfirst Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Bancfirst Price Channel

US Bancorp 
US Bancorp Performance
0 of 100
Over the last 90 days US Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

US Bancorp Price Channel

Bancfirst Corp and US Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bancfirst Corp and US Bancorp

The main advantage of trading using opposite Bancfirst Corp and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancfirst 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.
Bancfirst Corp vs. Amazon Inc
The idea behind Bancfirst 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 vs. Amazon Inc
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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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