Correlation Between Postal Svgs and US Bancorp

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

Diversification Opportunities for Postal Svgs and US Bancorp

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Postal and US Bancorp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Postal Svgs Bk and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp and Postal Svgs 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 Postal Svgs Bk 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 Postal Svgs i.e., Postal Svgs and US Bancorp go up and down completely randomly.

Pair Corralation between Postal Svgs and US Bancorp

If you would invest (100.00)  in Postal Svgs Bk on March 29, 2022 and sell it today you would earn a total of  100.00  from holding Postal Svgs Bk or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Postal Svgs Bk  vs.  US Bancorp

 Performance (%) 
      Timeline 
Postal Svgs Bk 
Postal Performance
0 of 100
Over the last 90 days Postal Svgs Bk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Postal Svgs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0397
Payout Ratio
0.4
Last Split Factor
3:1
Forward Annual Dividend Rate
1.84
Dividend Date
2022-07-15
Ex Dividend Date
2022-06-29
Last Split Date
1999-04-16

US Bancorp Price Channel

Postal Svgs and US Bancorp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Postal Svgs and US Bancorp

The main advantage of trading using opposite Postal Svgs and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Svgs 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.

Postal Svgs Bk

Pair trading matchups for Postal Svgs

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Postal Svgs as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Postal Svgs' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Postal Svgs' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Postal Svgs Bk.
The idea behind Postal Svgs Bk 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.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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