Correlation Between Hancock Whitney and Southern Michigan
Can any of the company-specific risk be diversified away by investing in both Hancock Whitney and Southern Michigan 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 Hancock Whitney and Southern Michigan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hancock Whitney Corp and Southern Michigan Bancorp, you can compare the effects of market volatilities on Hancock Whitney and Southern Michigan 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 Hancock Whitney with a short position of Southern Michigan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hancock Whitney and Southern Michigan.
Diversification Opportunities for Hancock Whitney and Southern Michigan
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hancock and Southern is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hancock Whitney Corp and Southern Michigan Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Michigan Bancorp and Hancock Whitney 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 Hancock Whitney Corp are associated (or correlated) with Southern Michigan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Michigan Bancorp has no effect on the direction of Hancock Whitney i.e., Hancock Whitney and Southern Michigan go up and down completely randomly.
Pair Corralation between Hancock Whitney and Southern Michigan
Considering the 90-day investment horizon Hancock Whitney is expected to generate 1.16 times less return on investment than Southern Michigan. In addition to that, Hancock Whitney is 3.23 times more volatile than Southern Michigan Bancorp. It trades about 0.06 of its total potential returns per unit of risk. Southern Michigan Bancorp is currently generating about 0.23 per unit of volatility. If you would invest 1,715 in Southern Michigan Bancorp on September 26, 2024 and sell it today you would earn a total of 210.00 from holding Southern Michigan Bancorp or generate 12.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hancock Whitney Corp vs. Southern Michigan Bancorp
Performance |
Timeline |
Hancock Whitney Corp |
Southern Michigan Bancorp |
Hancock Whitney and Southern Michigan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hancock Whitney and Southern Michigan
The main advantage of trading using opposite Hancock Whitney and Southern Michigan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hancock Whitney position performs unexpectedly, Southern Michigan 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 Southern Michigan will offset losses from the drop in Southern Michigan's long position.Hancock Whitney vs. Home Bancorp | Hancock Whitney vs. First Business Financial | Hancock Whitney vs. LINKBANCORP | Hancock Whitney vs. Great Southern Bancorp |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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