Correlation Between Controladora Vuela and US Bancorp

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

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

Diversification Opportunities for Controladora Vuela and US Bancorp

0.32

Correlation Coefficient

Controladora Vuela  US Bancorp

Weak diversification

The 3 months correlation between Controladora and USB is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Controladora Vuela Compaa and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp and Controladora Vuela 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 Controladora Vuela Compaa 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 Controladora Vuela i.e., Controladora Vuela and US Bancorp go up and down completely randomly.

Pair Corralation between Controladora Vuela and US Bancorp

Assuming the 90 days trading horizon Controladora Vuela is expected to generate 598.25 times less return on investment than US Bancorp. In addition to that, Controladora Vuela is 2.34 times more volatile than US Bancorp. It trades about 0.0 of its total potential returns per unit of risk. US Bancorp is currently generating about 0.17 per unit of volatility. If you would invest  76,158  in US Bancorp on April 21, 2025 and sell it today you would earn a total of  12,042  from holding US Bancorp or generate 15.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Controladora Vuela Compaa  vs.  US Bancorp

Controladora Vuela Compaa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Controladora Vuela Compaa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Controladora Vuela is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

US Bancorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in US Bancorp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, US Bancorp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Controladora Vuela and US Bancorp

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

The idea behind Controladora Vuela Compaa 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.