Correlation Between Southern Missouri and German American
Can any of the company-specific risk be diversified away by investing in both Southern Missouri and German American 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 Missouri and German American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Missouri Bancorp and German American Bancorp, you can compare the effects of market volatilities on Southern Missouri and German American 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 Missouri with a short position of German American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Missouri and German American.
Diversification Opportunities for Southern Missouri and German American
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Southern and German is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Southern Missouri Bancorp and German American Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on German American Bancorp and Southern Missouri 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 Missouri Bancorp are associated (or correlated) with German American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of German American Bancorp has no effect on the direction of Southern Missouri i.e., Southern Missouri and German American go up and down completely randomly.
Pair Corralation between Southern Missouri and German American
Given the investment horizon of 90 days Southern Missouri Bancorp is expected to generate 1.45 times more return on investment than German American. However, Southern Missouri is 1.45 times more volatile than German American Bancorp. It trades about 0.0 of its potential returns per unit of risk. German American Bancorp is currently generating about -0.13 per unit of risk. If you would invest 5,851 in Southern Missouri Bancorp on December 1, 2024 and sell it today you would lose (21.00) from holding Southern Missouri Bancorp or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Missouri Bancorp vs. German American Bancorp
Performance |
| Timeline |
| Southern Missouri Bancorp |
| German American Bancorp |
Southern Missouri and German American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Missouri and German American
The main advantage of trading using opposite Southern Missouri and German American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Missouri position performs unexpectedly, German American 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 German American will offset losses from the drop in German American's long position.| Southern Missouri vs. Commerzbank AG | Southern Missouri vs. Investar Holding Corp | Southern Missouri vs. Colony Bankcorp | Southern Missouri vs. Western New England |
| German American vs. Lakeland Financial | German American vs. Great Southern Bancorp | German American vs. First Merchants | German American vs. First Financial |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |