Correlation Between Tri-County Financial and Southeastern Banking
Can any of the company-specific risk be diversified away by investing in both Tri-County Financial and Southeastern Banking 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 Tri-County Financial and Southeastern Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tri County Financial Group and Southeastern Banking Corp, you can compare the effects of market volatilities on Tri-County Financial and Southeastern Banking 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 Tri-County Financial with a short position of Southeastern Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri-County Financial and Southeastern Banking.
Diversification Opportunities for Tri-County Financial and Southeastern Banking
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tri-County and Southeastern is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tri County Financial Group and Southeastern Banking Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southeastern Banking Corp and Tri-County Financial 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 Tri County Financial Group are associated (or correlated) with Southeastern Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southeastern Banking Corp has no effect on the direction of Tri-County Financial i.e., Tri-County Financial and Southeastern Banking go up and down completely randomly.
Pair Corralation between Tri-County Financial and Southeastern Banking
Given the investment horizon of 90 days Tri-County Financial is expected to generate 2.4 times less return on investment than Southeastern Banking. But when comparing it to its historical volatility, Tri County Financial Group is 1.63 times less risky than Southeastern Banking. It trades about 0.06 of its potential returns per unit of risk. Southeastern Banking Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,952 in Southeastern Banking Corp on August 29, 2024 and sell it today you would earn a total of 422.00 from holding Southeastern Banking Corp or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Tri County Financial Group vs. Southeastern Banking Corp
Performance |
| Timeline |
| Tri County Financial |
| Southeastern Banking Corp |
Tri-County Financial and Southeastern Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tri-County Financial and Southeastern Banking
The main advantage of trading using opposite Tri-County Financial and Southeastern Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tri-County Financial position performs unexpectedly, Southeastern Banking 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 Southeastern Banking will offset losses from the drop in Southeastern Banking's long position.| Tri-County Financial vs. Taylor Calvin B | Tri-County Financial vs. United Bancorporation of | Tri-County Financial vs. Virginia National Bankshares | Tri-County Financial vs. Lyons Bancorp |
| Southeastern Banking vs. Israel Discount Bank | Southeastern Banking vs. Baraboo Bancorporation | Southeastern Banking vs. Danske Bank AS | Southeastern Banking vs. Jyske Bank AS |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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