Correlation Between Pinnacle Financial and Southern First
Can any of the company-specific risk be diversified away by investing in both Pinnacle Financial and Southern First 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 Pinnacle Financial and Southern First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Financial Partners and Southern First Bancshares, you can compare the effects of market volatilities on Pinnacle Financial and Southern First 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 Pinnacle Financial with a short position of Southern First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Financial and Southern First.
Diversification Opportunities for Pinnacle Financial and Southern First
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pinnacle and Southern is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Financial Partners and Southern First Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern First Bancshares and Pinnacle Financial 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 Pinnacle Financial Partners are associated (or correlated) with Southern First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern First Bancshares has no effect on the direction of Pinnacle Financial i.e., Pinnacle Financial and Southern First go up and down completely randomly.
Pair Corralation between Pinnacle Financial and Southern First
Given the investment horizon of 90 days Pinnacle Financial Partners is expected to generate 0.61 times more return on investment than Southern First. However, Pinnacle Financial Partners is 1.64 times less risky than Southern First. It trades about 0.29 of its potential returns per unit of risk. Southern First Bancshares is currently generating about 0.1 per unit of risk. If you would invest 11,549 in Pinnacle Financial Partners on November 9, 2024 and sell it today you would earn a total of 1,066 from holding Pinnacle Financial Partners or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Financial Partners vs. Southern First Bancshares
Performance |
| Timeline |
| Pinnacle Financial |
| Southern First Bancshares |
Pinnacle Financial and Southern First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Financial and Southern First
The main advantage of trading using opposite Pinnacle Financial and Southern First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Financial position performs unexpectedly, Southern First 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 Southern First will offset losses from the drop in Southern First's long position.| Pinnacle Financial vs. Wintrust Financial | Pinnacle Financial vs. Renasant | Pinnacle Financial vs. Texas Capital Bancshares | Pinnacle Financial vs. Home BancShares |
| Southern First vs. First Community | Southern First vs. Old Point Financial | Southern First vs. Oak Valley Bancorp | Southern First vs. Chemung Financial Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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