Correlation Between Southern Banc and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both Southern Banc and Waterstone Financial 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 Waterstone Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Banc and Waterstone Financial, you can compare the effects of market volatilities on Southern Banc and Waterstone Financial 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 Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Banc and Waterstone Financial.
Diversification Opportunities for Southern Banc and Waterstone Financial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southern and Waterstone is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Southern Banc and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone Financial 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 Waterstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waterstone Financial has no effect on the direction of Southern Banc i.e., Southern Banc and Waterstone Financial go up and down completely randomly.
Pair Corralation between Southern Banc and Waterstone Financial
If you would invest 1,149 in Waterstone Financial on September 14, 2024 and sell it today you would earn a total of 331.00 from holding Waterstone Financial or generate 28.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.37% |
| Values | Daily Returns |
Southern Banc vs. Waterstone Financial
Performance |
| Timeline |
| Southern Banc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Waterstone Financial |
Southern Banc and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Banc and Waterstone Financial
The main advantage of trading using opposite Southern Banc and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Banc position performs unexpectedly, Waterstone Financial 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 Waterstone Financial will offset losses from the drop in Waterstone Financial'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 |
| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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