Correlation Between Southside Bancshares, and Simmons First

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Can any of the company-specific risk be diversified away by investing in both Southside Bancshares, and Simmons First 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 Simmons First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southside Bancshares, and Simmons First National, you can compare the effects of market volatilities on Southside Bancshares, and Simmons First 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 Simmons First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southside Bancshares, and Simmons First.

Diversification Opportunities for Southside Bancshares, and Simmons First

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Southside and Simmons is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Southside Bancshares, and Simmons First National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simmons First National 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 Simmons First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simmons First National has no effect on the direction of Southside Bancshares, i.e., Southside Bancshares, and Simmons First go up and down completely randomly.

Pair Corralation between Southside Bancshares, and Simmons First

Given the investment horizon of 90 days Southside Bancshares, is expected to generate 30.55 times less return on investment than Simmons First. In addition to that, Southside Bancshares, is 1.31 times more volatile than Simmons First National. It trades about 0.0 of its total potential returns per unit of risk. Simmons First National is currently generating about 0.07 per unit of volatility. If you would invest  2,097  in Simmons First National on September 27, 2024 and sell it today you would earn a total of  153.00  from holding Simmons First National or generate 7.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Southside Bancshares,  vs.  Simmons First National

 Performance 
       Timeline  
Southside Bancshares, 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Simmons First National 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Simmons First National are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Simmons First may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Southside Bancshares, and Simmons First Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Southside Bancshares, and Simmons First

The main advantage of trading using opposite Southside Bancshares, and Simmons First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southside Bancshares, position performs unexpectedly, Simmons First 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 Simmons First will offset losses from the drop in Simmons First's long position.
The idea behind Southside Bancshares, and Simmons First National 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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