Correlation Between Great Southern and TriCo Bancshares
Can any of the company-specific risk be diversified away by investing in both Great Southern and TriCo 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 TriCo 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 TriCo Bancshares, you can compare the effects of market volatilities on Great Southern and TriCo 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 TriCo Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Southern and TriCo Bancshares.
Diversification Opportunities for Great Southern and TriCo Bancshares
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Great and TriCo is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Great Southern Bancorp and TriCo Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriCo 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 TriCo Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriCo Bancshares has no effect on the direction of Great Southern i.e., Great Southern and TriCo Bancshares go up and down completely randomly.
Pair Corralation between Great Southern and TriCo Bancshares
Given the investment horizon of 90 days Great Southern Bancorp is expected to generate 0.82 times more return on investment than TriCo Bancshares. However, Great Southern Bancorp is 1.21 times less risky than TriCo Bancshares. It trades about 0.02 of its potential returns per unit of risk. TriCo Bancshares is currently generating about 0.01 per unit of risk. If you would invest 5,706 in Great Southern Bancorp on August 28, 2024 and sell it today you would earn a total of 617.00 from holding Great Southern Bancorp or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Southern Bancorp vs. TriCo Bancshares
Performance |
| Timeline |
| Great Southern Bancorp |
| TriCo Bancshares |
Great Southern and TriCo Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Southern and TriCo Bancshares
The main advantage of trading using opposite Great Southern and TriCo Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Southern position performs unexpectedly, TriCo 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 TriCo Bancshares will offset losses from the drop in TriCo Bancshares' long position.| Great Southern vs. Fifth Third Bancorp | Great Southern vs. Huntington Bancshares Incorporated | Great Southern vs. MT Bank |
| TriCo Bancshares vs. Fifth Third Bancorp | TriCo Bancshares vs. Huntington Bancshares Incorporated | TriCo Bancshares vs. MT Bank |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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