Correlation Between US Bancorp and CME

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

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

Diversification Opportunities for US Bancorp and CME

-0.05

Correlation Coefficient

US Bancorp  CME

Good diversification

The 3 months correlation between USB and CME is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group and US Bancorp 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 US Bancorp are associated (or correlated) with CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of US Bancorp i.e., US Bancorp and CME go up and down completely randomly.

Pair Corralation between US Bancorp and CME

Considering the 90-day investment horizon US Bancorp is expected to generate 1.3 times more return on investment than CME. However, US Bancorp is 1.3 times more volatile than CME Group. It trades about 0.07 of its potential returns per unit of risk. CME Group is currently generating about 0.05 per unit of risk. If you would invest  4,880  in US Bancorp on September 11, 2025 and sell it today you would earn a total of  277.00  from holding US Bancorp or generate 5.68% return on investment over 90 days.

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

US Bancorp  vs.  CME Group

US Bancorp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in US Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, US Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CME Group

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in CME Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, CME is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with US Bancorp and CME

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

The idea behind US Bancorp and CME 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.

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 the FinTech Suite module to use AI to screen and filter profitable investment opportunities.