Correlation Between First State and Southern BancShares
Can any of the company-specific risk be diversified away by investing in both First State and Southern BancShares 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 First State and Southern BancShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First State Financial and Southern BancShares PFD, you can compare the effects of market volatilities on First State and Southern BancShares 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 First State with a short position of Southern BancShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and Southern BancShares.
Diversification Opportunities for First State and Southern BancShares
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Southern is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and Southern BancShares PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern BancShares PFD and First State 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 First State Financial are associated (or correlated) with Southern BancShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern BancShares PFD has no effect on the direction of First State i.e., First State and Southern BancShares go up and down completely randomly.
Pair Corralation between First State and Southern BancShares
If you would invest 1,270 in Southern BancShares PFD on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Southern BancShares PFD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
First State Financial vs. Southern BancShares PFD
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Southern BancShares PFD |
First State and Southern BancShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and Southern BancShares
The main advantage of trading using opposite First State and Southern BancShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, Southern BancShares 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 Southern BancShares will offset losses from the drop in Southern BancShares' long position.| First State vs. First Interstate BancSystem | First State vs. First Financial Bankshares | First State vs. CVB Financial | First State vs. Eagle Bancorp Montana |
| Southern BancShares vs. Grocery Outlet Holding | Southern BancShares vs. PennantPark Floating Rate | Southern BancShares vs. FS KKR Capital | Southern BancShares vs. Gladstone 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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