Correlation Between Old National and Trustmark
Can any of the company-specific risk be diversified away by investing in both Old National and Trustmark 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 Old National and Trustmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old National Bancorp and Trustmark, you can compare the effects of market volatilities on Old National and Trustmark 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 Old National with a short position of Trustmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old National and Trustmark.
Diversification Opportunities for Old National and Trustmark
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Old and Trustmark is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Old National Bancorp and Trustmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustmark and Old National 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 Old National Bancorp are associated (or correlated) with Trustmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustmark has no effect on the direction of Old National i.e., Old National and Trustmark go up and down completely randomly.
Pair Corralation between Old National and Trustmark
Considering the 90-day investment horizon Old National Bancorp is expected to generate 0.94 times more return on investment than Trustmark. However, Old National Bancorp is 1.06 times less risky than Trustmark. It trades about 0.04 of its potential returns per unit of risk. Trustmark is currently generating about 0.03 per unit of risk. If you would invest 1,701 in Old National Bancorp on September 2, 2024 and sell it today you would earn a total of 615.00 from holding Old National Bancorp or generate 36.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old National Bancorp vs. Trustmark
Performance |
| Timeline |
| Old National Bancorp |
| Trustmark |
Old National and Trustmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old National and Trustmark
The main advantage of trading using opposite Old National and Trustmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old National position performs unexpectedly, Trustmark 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 Trustmark will offset losses from the drop in Trustmark's long position.| Old National vs. Independent Bank | Old National vs. First Financial Bancorp | Old National vs. Lakeland Financial | Old National vs. National Bank Holdings |
| Trustmark vs. Home Bancorp | Trustmark vs. First Business Financial | Trustmark vs. LINKBANCORP | Trustmark vs. Great Southern 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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