Correlation Between Prosperity Bancshares and SouthState
Can any of the company-specific risk be diversified away by investing in both Prosperity Bancshares and SouthState 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 SouthState into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosperity Bancshares and SouthState, you can compare the effects of market volatilities on Prosperity Bancshares and SouthState 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 SouthState. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosperity Bancshares and SouthState.
Diversification Opportunities for Prosperity Bancshares and SouthState
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prosperity and SouthState is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Prosperity Bancshares and SouthState in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SouthState 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 SouthState. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SouthState has no effect on the direction of Prosperity Bancshares i.e., Prosperity Bancshares and SouthState go up and down completely randomly.
Pair Corralation between Prosperity Bancshares and SouthState
Allowing for the 90-day total investment horizon Prosperity Bancshares is expected to generate 1.11 times less return on investment than SouthState. But when comparing it to its historical volatility, Prosperity Bancshares is 1.38 times less risky than SouthState. It trades about 0.17 of its potential returns per unit of risk. SouthState is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 7,652 in SouthState on August 25, 2024 and sell it today you would earn a total of 3,248 from holding SouthState or generate 42.45% 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. SouthState
Performance |
| Timeline |
| Prosperity Bancshares |
| SouthState |
Prosperity Bancshares and SouthState Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosperity Bancshares and SouthState
The main advantage of trading using opposite Prosperity Bancshares and SouthState positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosperity Bancshares position performs unexpectedly, SouthState 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 SouthState will offset losses from the drop in SouthState'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 |
| SouthState vs. Fifth Third Bancorp | SouthState vs. Zions Bancorporation | SouthState vs. Huntington Bancshares Incorporated | SouthState vs. PNC Financial Services |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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