Correlation Between Prosperity Bancshares and FB Financial
Can any of the company-specific risk be diversified away by investing in both Prosperity Bancshares and FB Financial 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 FB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosperity Bancshares and FB Financial Corp, you can compare the effects of market volatilities on Prosperity Bancshares and FB Financial 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 FB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosperity Bancshares and FB Financial.
Diversification Opportunities for Prosperity Bancshares and FB Financial
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prosperity and FBK is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Prosperity Bancshares and FB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FB Financial Corp 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 FB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FB Financial Corp has no effect on the direction of Prosperity Bancshares i.e., Prosperity Bancshares and FB Financial go up and down completely randomly.
Pair Corralation between Prosperity Bancshares and FB Financial
Allowing for the 90-day total investment horizon Prosperity Bancshares is expected to generate 0.8 times more return on investment than FB Financial. However, Prosperity Bancshares is 1.25 times less risky than FB Financial. It trades about 0.2 of its potential returns per unit of risk. FB Financial Corp is currently generating about 0.12 per unit of risk. If you would invest 7,569 in Prosperity Bancshares on October 23, 2024 and sell it today you would earn a total of 370.00 from holding Prosperity Bancshares or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosperity Bancshares vs. FB Financial Corp
Performance |
| Timeline |
| Prosperity Bancshares |
| FB Financial Corp |
Prosperity Bancshares and FB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosperity Bancshares and FB Financial
The main advantage of trading using opposite Prosperity Bancshares and FB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosperity Bancshares position performs unexpectedly, FB Financial 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 FB Financial will offset losses from the drop in FB Financial's long position.| Prosperity Bancshares vs. Heartland Financial USA | Prosperity Bancshares vs. Heritage Commerce Corp | Prosperity Bancshares vs. Business First Bancshares | Prosperity Bancshares vs. German American Bancorp |
| FB Financial vs. Home Bancorp | FB Financial vs. First Business Financial | FB Financial vs. LINKBANCORP | FB Financial 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges |