Correlation Between Southern Banc and First National
Can any of the company-specific risk be diversified away by investing in both Southern Banc and First National 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 First National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Banc and First National Bank, you can compare the effects of market volatilities on Southern Banc and First National 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 First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Banc and First National.
Diversification Opportunities for Southern Banc and First National
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Southern and First is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Southern Banc and First National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Bank 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 First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Bank has no effect on the direction of Southern Banc i.e., Southern Banc and First National go up and down completely randomly.
Pair Corralation between Southern Banc and First National
If you would invest 17,894 in First National Bank on September 14, 2024 and sell it today you would earn a total of 5,106 from holding First National Bank or generate 28.53% 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. First National Bank
Performance |
| Timeline |
| Southern Banc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First National Bank |
Southern Banc and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Banc and First National
The main advantage of trading using opposite Southern Banc and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Banc position performs unexpectedly, First National 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 First National will offset losses from the drop in First National'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 |
| First National vs. IF Bancorp | First National vs. LINKBANCORP | First National vs. Pathfinder Bancorp | First National vs. First Keystone 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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