Correlation Between Great Southern and Renasant
Can any of the company-specific risk be diversified away by investing in both Great Southern and Renasant 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 Renasant 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 Renasant, you can compare the effects of market volatilities on Great Southern and Renasant 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 Renasant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Southern and Renasant.
Diversification Opportunities for Great Southern and Renasant
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Great and Renasant is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Great Southern Bancorp and Renasant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renasant 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 Renasant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renasant has no effect on the direction of Great Southern i.e., Great Southern and Renasant go up and down completely randomly.
Pair Corralation between Great Southern and Renasant
Given the investment horizon of 90 days Great Southern Bancorp is expected to generate 0.86 times more return on investment than Renasant. However, Great Southern Bancorp is 1.16 times less risky than Renasant. It trades about -0.09 of its potential returns per unit of risk. Renasant is currently generating about -0.09 per unit of risk. If you would invest 5,953 in Great Southern Bancorp on November 27, 2024 and sell it today you would lose (166.00) from holding Great Southern Bancorp or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Southern Bancorp vs. Renasant
Performance |
| Timeline |
| Great Southern Bancorp |
| Renasant |
Great Southern and Renasant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Southern and Renasant
The main advantage of trading using opposite Great Southern and Renasant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Southern position performs unexpectedly, Renasant 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 Renasant will offset losses from the drop in Renasant'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 |
| Renasant vs. Simmons First National | Renasant vs. Trustmark | Renasant vs. Sandy Spring Bancorp | Renasant vs. Stock Yards Bancorp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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