Correlation Between Southern BancShares and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Southern BancShares and Dow Jones 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 Southern BancShares and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern BancShares NC and Dow Jones Industrial, you can compare the effects of market volatilities on Southern BancShares and Dow Jones 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 Southern BancShares with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern BancShares and Dow Jones.
Diversification Opportunities for Southern BancShares and Dow Jones
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Southern and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Southern BancShares NC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Southern 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 Southern BancShares NC are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Southern BancShares i.e., Southern BancShares and Dow Jones go up and down completely randomly.
Pair Corralation between Southern BancShares and Dow Jones
Given the investment horizon of 90 days Southern BancShares NC is expected to generate 2.71 times more return on investment than Dow Jones. However, Southern BancShares is 2.71 times more volatile than Dow Jones Industrial. It trades about 0.13 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.3 per unit of risk. If you would invest 680,000 in Southern BancShares NC on August 31, 2024 and sell it today you would earn a total of 45,000 from holding Southern BancShares NC or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Southern BancShares NC vs. Dow Jones Industrial
Performance |
| Timeline |
Southern BancShares and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Southern BancShares NC
Pair trading matchups for Southern BancShares
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Southern BancShares and Dow Jones
The main advantage of trading using opposite Southern BancShares and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern BancShares position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Southern BancShares vs. Nmb Financial Corp | Southern BancShares vs. Hang Seng Bank | Southern BancShares vs. Merchants Marine Bancorp | Southern BancShares vs. Mission Valley Bancorp |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |