Correlation Between Southern Banc and National Bank
Can any of the company-specific risk be diversified away by investing in both Southern Banc and National Bank 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 National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Banc and National Bank Holdings, you can compare the effects of market volatilities on Southern Banc and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Banc and National Bank.
Diversification Opportunities for Southern Banc and National Bank
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Southern and National is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Southern Banc and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank Holdings has no effect on the direction of Southern Banc i.e., Southern Banc and National Bank go up and down completely randomly.
Pair Corralation between Southern Banc and National Bank
If you would invest 3,200 in National Bank Holdings on September 14, 2024 and sell it today you would earn a total of 1,436 from holding National Bank Holdings or generate 44.88% 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. National Bank Holdings
Performance |
| Timeline |
| Southern Banc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| National Bank Holdings |
Southern Banc and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Banc and National Bank
The main advantage of trading using opposite Southern Banc and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Banc position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank'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 |
| National Bank vs. First Community | National Bank vs. Community West Bancshares | National Bank vs. First Financial Northwest | National Bank vs. First Northwest Bancorp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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