Correlation Between Prosperity Bancshares and Old Market
Can any of the company-specific risk be diversified away by investing in both Prosperity Bancshares and Old Market 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 Old Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosperity Bancshares and Old Market Capital, you can compare the effects of market volatilities on Prosperity Bancshares and Old Market 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 Old Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosperity Bancshares and Old Market.
Diversification Opportunities for Prosperity Bancshares and Old Market
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosperity and Old is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Prosperity Bancshares and Old Market Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Market Capital 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 Old Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Market Capital has no effect on the direction of Prosperity Bancshares i.e., Prosperity Bancshares and Old Market go up and down completely randomly.
Pair Corralation between Prosperity Bancshares and Old Market
Allowing for the 90-day total investment horizon Prosperity Bancshares is expected to generate 0.7 times more return on investment than Old Market. However, Prosperity Bancshares is 1.42 times less risky than Old Market. It trades about 0.1 of its potential returns per unit of risk. Old Market Capital is currently generating about -0.03 per unit of risk. If you would invest 6,224 in Prosperity Bancshares on August 28, 2024 and sell it today you would earn a total of 2,283 from holding Prosperity Bancshares or generate 36.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosperity Bancshares vs. Old Market Capital
Performance |
| Timeline |
| Prosperity Bancshares |
| Old Market Capital |
Prosperity Bancshares and Old Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosperity Bancshares and Old Market
The main advantage of trading using opposite Prosperity Bancshares and Old Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosperity Bancshares position performs unexpectedly, Old Market 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 Old Market will offset losses from the drop in Old Market'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 |
| Old Market vs. Old Dominion Freight | Old Market vs. Sphere Entertainment Co | Old Market vs. Hooker Furniture | Old Market vs. Emerson Radio |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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