Correlation Between Great Southern and Shore Bancshares
Can any of the company-specific risk be diversified away by investing in both Great Southern and Shore 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 Great Southern and Shore Bancshares 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 Shore Bancshares, you can compare the effects of market volatilities on Great Southern and Shore 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 Great Southern with a short position of Shore Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Southern and Shore Bancshares.
Diversification Opportunities for Great Southern and Shore Bancshares
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Great and Shore is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Great Southern Bancorp and Shore Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shore Bancshares 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 Shore Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shore Bancshares has no effect on the direction of Great Southern i.e., Great Southern and Shore Bancshares go up and down completely randomly.
Pair Corralation between Great Southern and Shore Bancshares
Given the investment horizon of 90 days Great Southern Bancorp is expected to generate 0.91 times more return on investment than Shore Bancshares. However, Great Southern Bancorp is 1.1 times less risky than Shore Bancshares. It trades about -0.43 of its potential returns per unit of risk. Shore Bancshares is currently generating about -0.4 per unit of risk. If you would invest 6,543 in Great Southern Bancorp on October 14, 2024 and sell it today you would lose (836.00) from holding Great Southern Bancorp or give up 12.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Southern Bancorp vs. Shore Bancshares
Performance |
| Timeline |
| Great Southern Bancorp |
| Shore Bancshares |
Great Southern and Shore Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Southern and Shore Bancshares
The main advantage of trading using opposite Great Southern and Shore Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Southern position performs unexpectedly, Shore 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 Shore Bancshares will offset losses from the drop in Shore Bancshares' 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 |
| Shore Bancshares vs. Home Federal Bancorp | Shore Bancshares vs. IF Bancorp | Shore Bancshares vs. Western New England | Shore Bancshares vs. Colony Bankcorp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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