Correlation Between SmartFinancial, and Great Southern

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Can any of the company-specific risk be diversified away by investing in both SmartFinancial, 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 SmartFinancial, and Great Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SmartFinancial, and Great Southern Bancorp, you can compare the effects of market volatilities on SmartFinancial, 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 SmartFinancial, with a short position of Great Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartFinancial, and Great Southern.

Diversification Opportunities for SmartFinancial, and Great Southern

SmartFinancial,GreatDiversified AwaySmartFinancial,GreatDiversified Away100%
0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between SmartFinancial, and Great is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SmartFinancial, 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 SmartFinancial, 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 SmartFinancial, 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 SmartFinancial, i.e., SmartFinancial, and Great Southern go up and down completely randomly.

Pair Corralation between SmartFinancial, and Great Southern

Given the investment horizon of 90 days SmartFinancial, is expected to generate 0.89 times more return on investment than Great Southern. However, SmartFinancial, is 1.13 times less risky than Great Southern. It trades about 0.04 of its potential returns per unit of risk. Great Southern Bancorp is currently generating about 0.01 per unit of risk. If you would invest  3,299  in SmartFinancial, on November 27, 2024 and sell it today you would earn a total of  148.00  from holding SmartFinancial, or generate 4.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SmartFinancial,  vs.  Great Southern Bancorp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15SMBK GSBC
       Timeline  
SmartFinancial, 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days SmartFinancial, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, SmartFinancial, is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb293031323334353637
Great Southern Bancorp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Great Southern Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb565860626466

SmartFinancial, and Great Southern Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.83-2.12-1.41-0.7-0.01140.661.352.032.723.41 0.080.100.120.14
JavaScript chart by amCharts 3.21.15SMBK GSBC
       Returns  

Pair Trading with SmartFinancial, and Great Southern

The main advantage of trading using opposite SmartFinancial, and Great Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartFinancial, 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.
The idea behind SmartFinancial, and Great Southern Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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