Correlation Between Prosperity Bancshares and Ameris Bancorp
Can any of the company-specific risk be diversified away by investing in both Prosperity Bancshares and Ameris Bancorp 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 Prosperity Bancshares and Ameris Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosperity Bancshares and Ameris Bancorp, you can compare the effects of market volatilities on Prosperity Bancshares and Ameris Bancorp 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 Prosperity Bancshares with a short position of Ameris Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosperity Bancshares and Ameris Bancorp.
Diversification Opportunities for Prosperity Bancshares and Ameris Bancorp
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prosperity and Ameris is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Prosperity Bancshares and Ameris Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameris Bancorp and Prosperity Bancshares 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 Prosperity Bancshares are associated (or correlated) with Ameris Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameris Bancorp has no effect on the direction of Prosperity Bancshares i.e., Prosperity Bancshares and Ameris Bancorp go up and down completely randomly.
Pair Corralation between Prosperity Bancshares and Ameris Bancorp
Allowing for the 90-day total investment horizon Prosperity Bancshares is expected to generate 0.74 times more return on investment than Ameris Bancorp. However, Prosperity Bancshares is 1.35 times less risky than Ameris Bancorp. It trades about 0.1 of its potential returns per unit of risk. Ameris Bancorp is currently generating about 0.05 per unit of risk. If you would invest 7,255 in Prosperity Bancshares on November 1, 2024 and sell it today you would earn a total of 777.00 from holding Prosperity Bancshares or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosperity Bancshares vs. Ameris Bancorp
Performance |
| Timeline |
| Prosperity Bancshares |
| Ameris Bancorp |
Prosperity Bancshares and Ameris Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosperity Bancshares and Ameris Bancorp
The main advantage of trading using opposite Prosperity Bancshares and Ameris Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosperity Bancshares position performs unexpectedly, Ameris Bancorp 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 Ameris Bancorp will offset losses from the drop in Ameris Bancorp's long position.| Prosperity Bancshares vs. Home Federal Bancorp | Prosperity Bancshares vs. Magyar Bancorp | Prosperity Bancshares vs. First Capital | Prosperity Bancshares vs. HomeTrust Bancshares |
| Ameris Bancorp vs. Kearny Financial Corp | Ameris Bancorp vs. Bankwell Financial Group | Ameris Bancorp vs. Business First Bancshares | Ameris Bancorp vs. Home Federal 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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