Correlation Between Great Southern and Grand River
Can any of the company-specific risk be diversified away by investing in both Great Southern and Grand River 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 Great Southern and Grand River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Southern Bancorp and Grand River Commerce, you can compare the effects of market volatilities on Great Southern and Grand River 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 Great Southern with a short position of Grand River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Southern and Grand River.
Diversification Opportunities for Great Southern and Grand River
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Great and Grand is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Great Southern Bancorp and Grand River Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand River Commerce and Great Southern 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 Great Southern Bancorp are associated (or correlated) with Grand River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand River Commerce has no effect on the direction of Great Southern i.e., Great Southern and Grand River go up and down completely randomly.
Pair Corralation between Great Southern and Grand River
Given the investment horizon of 90 days Great Southern Bancorp is expected to generate 0.97 times more return on investment than Grand River. However, Great Southern Bancorp is 1.03 times less risky than Grand River. It trades about 0.18 of its potential returns per unit of risk. Grand River Commerce is currently generating about 0.04 per unit of risk. If you would invest 5,669 in Great Southern Bancorp on September 1, 2024 and sell it today you would earn a total of 738.00 from holding Great Southern Bancorp or generate 13.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Southern Bancorp vs. Grand River Commerce
Performance |
| Timeline |
| Great Southern Bancorp |
| Grand River Commerce |
Great Southern and Grand River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Southern and Grand River
The main advantage of trading using opposite Great Southern and Grand River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Southern position performs unexpectedly, Grand River 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 Grand River will offset losses from the drop in Grand River's long position.| Great Southern vs. First Northwest Bancorp | Great Southern vs. Community West Bancshares | Great Southern vs. First Financial Northwest | Great Southern vs. First Capital |
| Grand River vs. FS Bancorp | Grand River vs. Eastern Michigan Financial | Grand River vs. Bank of Botetourt | Grand River vs. FNB 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 the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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