Correlation Between Peapack Gladstone and Great Southern
Can any of the company-specific risk be diversified away by investing in both Peapack Gladstone and Great Southern 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 Peapack Gladstone and Great Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peapack Gladstone Financial and Great Southern Bancorp, you can compare the effects of market volatilities on Peapack Gladstone and Great Southern 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 Peapack Gladstone with a short position of Great Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peapack Gladstone and Great Southern.
Diversification Opportunities for Peapack Gladstone and Great Southern
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Peapack and Great is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Peapack Gladstone Financial and Great Southern Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Southern Bancorp and Peapack Gladstone 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 Peapack Gladstone Financial are associated (or correlated) with Great Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Southern Bancorp has no effect on the direction of Peapack Gladstone i.e., Peapack Gladstone and Great Southern go up and down completely randomly.
Pair Corralation between Peapack Gladstone and Great Southern
Considering the 90-day investment horizon Peapack Gladstone Financial is expected to under-perform the Great Southern. In addition to that, Peapack Gladstone is 1.23 times more volatile than Great Southern Bancorp. It trades about -0.06 of its total potential returns per unit of risk. Great Southern Bancorp is currently generating about 0.06 per unit of volatility. If you would invest 5,951 in Great Southern Bancorp on October 24, 2024 and sell it today you would earn a total of 91.00 from holding Great Southern Bancorp or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Peapack Gladstone Financial vs. Great Southern Bancorp
Performance |
| Timeline |
| Peapack Gladstone |
| Great Southern Bancorp |
Peapack Gladstone and Great Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peapack Gladstone and Great Southern
The main advantage of trading using opposite Peapack Gladstone and Great Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peapack Gladstone position performs unexpectedly, Great Southern 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 Great Southern will offset losses from the drop in Great Southern's long position.| Peapack Gladstone vs. Sound Financial Bancorp | Peapack Gladstone vs. Finward Bancorp | Peapack Gladstone vs. Franklin Financial Services | Peapack Gladstone vs. Community West Bancshares |
| Great Southern vs. First Northwest Bancorp | Great Southern vs. Community West Bancshares | Great Southern vs. First Financial Northwest | Great Southern vs. First Capital |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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