Correlation Between Southside Bancshares, and Great Southern

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

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

Diversification Opportunities for Southside Bancshares, and Great Southern

0.8

Correlation Coefficient

Southside Bancshares,  Great Southern

Very poor diversification

The 3 months correlation between Southside and Great is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Southside Bancshares, and Great Southern Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Southern 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 Great Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Southern Bancorp has no effect on the direction of Southside Bancshares, i.e., Southside Bancshares, and Great Southern go up and down completely randomly.

Pair Corralation between Southside Bancshares, and Great Southern

Given the investment horizon of 90 days Southside Bancshares, is expected to under-perform the Great Southern. But the stock apears to be less risky and, when comparing its historical volatility, Southside Bancshares, is 1.06 times less risky than Great Southern. The stock trades about -0.01 of its potential returns per unit of risk. The Great Southern Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5,731  in Great Southern Bancorp on September 28, 2024 and sell it today you would earn a total of  367.00  from holding Great Southern Bancorp or generate 6.4% return on investment over 90 days.

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

Southside Bancshares,  vs.  Great Southern 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.

Great Southern Bancorp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Great Southern Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental drivers, Great Southern may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Southside Bancshares, and Great Southern

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

The idea behind Southside Bancshares, and Great Southern 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.