Correlation Between Southside Bancshares, and Finward Bancorp

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

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

Diversification Opportunities for Southside Bancshares, and Finward Bancorp

0.02

Correlation Coefficient

Southside Bancshares,  Finward Bancorp

Significant diversification

The 3 months correlation between Southside and Finward is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Southside Bancshares, and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp and Southside Bancshares, 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 Southside Bancshares, are associated (or correlated) with Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of Southside Bancshares, i.e., Southside Bancshares, and Finward Bancorp go up and down completely randomly.

Pair Corralation between Southside Bancshares, and Finward Bancorp

Given the investment horizon of 90 days Southside Bancshares, is expected to generate 2.12 times more return on investment than Finward Bancorp. However, Southside Bancshares, is 2.12 times more volatile than Finward Bancorp. It trades about 0.0 of its potential returns per unit of risk. Finward Bancorp is currently generating about -0.1 per unit of risk. If you would invest  3,277  in Southside Bancshares, on September 27, 2024 and sell it today you would lose (48.00) from holding Southside Bancshares, or give up 1.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Southside Bancshares,  vs.  Finward Bancorp

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.

Finward Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Finward Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Southside Bancshares, and Finward Bancorp

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

The idea behind Southside Bancshares, and Finward Bancorp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.