Correlation Between Oconee Federal and Southern Missouri
Can any of the company-specific risk be diversified away by investing in both Oconee Federal and Southern Missouri 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 Oconee Federal and Southern Missouri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oconee Federal Financial and Southern Missouri Bancorp, you can compare the effects of market volatilities on Oconee Federal and Southern Missouri 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 Oconee Federal with a short position of Southern Missouri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oconee Federal and Southern Missouri.
Diversification Opportunities for Oconee Federal and Southern Missouri
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oconee and Southern is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Federal Financial and Southern Missouri Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Missouri Bancorp and Oconee Federal 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 Oconee Federal Financial are associated (or correlated) with Southern Missouri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Missouri Bancorp has no effect on the direction of Oconee Federal i.e., Oconee Federal and Southern Missouri go up and down completely randomly.
Pair Corralation between Oconee Federal and Southern Missouri
Given the investment horizon of 90 days Oconee Federal Financial is expected to under-perform the Southern Missouri. In addition to that, Oconee Federal is 1.2 times more volatile than Southern Missouri Bancorp. It trades about -0.08 of its total potential returns per unit of risk. Southern Missouri Bancorp is currently generating about 0.04 per unit of volatility. If you would invest 4,822 in Southern Missouri Bancorp on August 24, 2024 and sell it today you would earn a total of 1,704 from holding Southern Missouri Bancorp or generate 35.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 32.12% |
| Values | Daily Returns |
Oconee Federal Financial vs. Southern Missouri Bancorp
Performance |
| Timeline |
| Oconee Federal Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Southern Missouri Bancorp |
Oconee Federal and Southern Missouri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oconee Federal and Southern Missouri
The main advantage of trading using opposite Oconee Federal and Southern Missouri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oconee Federal position performs unexpectedly, Southern Missouri 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 Southern Missouri will offset losses from the drop in Southern Missouri's long position.| Oconee Federal vs. Home Federal Bancorp | Oconee Federal vs. Community West Bancshares | Oconee Federal vs. Magyar Bancorp |
| Southern Missouri vs. Commerzbank AG | Southern Missouri vs. Investar Holding Corp | Southern Missouri vs. Colony Bankcorp | Southern Missouri vs. Western New England |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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