Correlation Between Southern Banc and Auburn Bancorp
Can any of the company-specific risk be diversified away by investing in both Southern Banc and Auburn Bancorp 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 Banc and Auburn Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Banc and Auburn Bancorp, you can compare the effects of market volatilities on Southern Banc and Auburn Bancorp 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 Banc with a short position of Auburn Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Banc and Auburn Bancorp.
Diversification Opportunities for Southern Banc and Auburn Bancorp
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Southern and Auburn is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Southern Banc and Auburn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn Bancorp and Southern Banc 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 Banc are associated (or correlated) with Auburn Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn Bancorp has no effect on the direction of Southern Banc i.e., Southern Banc and Auburn Bancorp go up and down completely randomly.
Pair Corralation between Southern Banc and Auburn Bancorp
If you would invest 830.00 in Auburn Bancorp on September 14, 2024 and sell it today you would earn a total of 19.00 from holding Auburn Bancorp or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.37% |
| Values | Daily Returns |
Southern Banc vs. Auburn Bancorp
Performance |
| Timeline |
| Southern Banc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Auburn Bancorp |
Southern Banc and Auburn Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Banc and Auburn Bancorp
The main advantage of trading using opposite Southern Banc and Auburn Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Banc position performs unexpectedly, Auburn Bancorp 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 Auburn Bancorp will offset losses from the drop in Auburn Bancorp's long position.| Southern Banc vs. 1895 of Wisconsin | Southern Banc vs. OptimumBank Holdings | Southern Banc vs. First National Bank | Southern Banc vs. CNB Financial |
| Auburn Bancorp vs. Freedom Bank of | Auburn Bancorp vs. HUMANA INC | Auburn Bancorp vs. Barloworld Ltd ADR | Auburn Bancorp vs. Morningstar Unconstrained Allocation |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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