Correlation Between ESSA Bancorp and Southside Bancshares,

Can any of the company-specific risk be diversified away by investing in both ESSA Bancorp and Southside Bancshares, 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 ESSA Bancorp and Southside Bancshares, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ESSA Bancorp and Southside Bancshares,, you can compare the effects of market volatilities on ESSA Bancorp and Southside Bancshares, 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 ESSA Bancorp with a short position of Southside Bancshares,. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSA Bancorp and Southside Bancshares,.

Diversification Opportunities for ESSA Bancorp and Southside Bancshares,

0.79

Correlation Coefficient

ESSA Bancorp  Southside Bancshares,

Poor diversification

The 3 months correlation between ESSA and Southside is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ESSA Bancorp and Southside Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southside Bancshares, and ESSA Bancorp 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 ESSA Bancorp are associated (or correlated) with Southside Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southside Bancshares, has no effect on the direction of ESSA Bancorp i.e., ESSA Bancorp and Southside Bancshares, go up and down completely randomly.

Pair Corralation between ESSA Bancorp and Southside Bancshares,

Given the investment horizon of 90 days ESSA Bancorp is expected to generate 0.94 times more return on investment than Southside Bancshares,. However, ESSA Bancorp is 1.06 times less risky than Southside Bancshares,. It trades about 0.02 of its potential returns per unit of risk. Southside Bancshares, is currently generating about -0.01 per unit of risk. If you would invest  1,908  in ESSA Bancorp on September 28, 2024 and sell it today you would earn a total of  35.00  from holding ESSA Bancorp or generate 1.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ESSA Bancorp  vs.  Southside Bancshares,

ESSA Bancorp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ESSA Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ESSA Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Southside Bancshares,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southside Bancshares, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Southside Bancshares, is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ESSA Bancorp and Southside Bancshares,

The main advantage of trading using opposite ESSA Bancorp and Southside Bancshares, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSA Bancorp position performs unexpectedly, Southside Bancshares, 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 Southside Bancshares, will offset losses from the drop in Southside Bancshares,'s long position.

The idea behind ESSA Bancorp and Southside Bancshares, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.