Correlation Between MT Bank and SouthState
Can any of the company-specific risk be diversified away by investing in both MT Bank and SouthState 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 MT Bank and SouthState into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank and SouthState, you can compare the effects of market volatilities on MT Bank and SouthState 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 MT Bank with a short position of SouthState. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and SouthState.
Diversification Opportunities for MT Bank and SouthState
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MTB and SouthState is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank and SouthState in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SouthState and MT Bank 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 MT Bank are associated (or correlated) with SouthState. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SouthState has no effect on the direction of MT Bank i.e., MT Bank and SouthState go up and down completely randomly.
Pair Corralation between MT Bank and SouthState
Considering the 90-day investment horizon MT Bank is expected to generate 4.02 times less return on investment than SouthState. But when comparing it to its historical volatility, MT Bank is 1.77 times less risky than SouthState. It trades about 0.03 of its potential returns per unit of risk. SouthState is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 10,039 in SouthState on November 22, 2024 and sell it today you would earn a total of 210.00 from holding SouthState or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MT Bank vs. SouthState
Performance |
| Timeline |
| MT Bank |
| SouthState |
MT Bank and SouthState Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MT Bank and SouthState
The main advantage of trading using opposite MT Bank and SouthState positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank position performs unexpectedly, SouthState 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 SouthState will offset losses from the drop in SouthState's long position.| MT Bank vs. US Bancorp | MT Bank vs. Truist Financial Corp | MT Bank vs. Fifth Third Bancorp | MT Bank vs. KeyCorp |
| SouthState vs. Pinnacle Financial Partners | SouthState vs. Southern First Bancshares | SouthState vs. SmartFinancial, | SouthState vs. WSFS Financial |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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