Correlation Between Southern and Hancock Whitney

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

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

Diversification Opportunities for Southern and Hancock Whitney

0.53

Correlation Coefficient

Southern  Hancock Whitney

Very weak diversification

The 3 months correlation between Southern and Hancock is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Southern Co and Hancock Whitney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney and Southern 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 Southern Co are associated (or correlated) with Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney has no effect on the direction of Southern i.e., Southern and Hancock Whitney go up and down completely randomly.

Pair Corralation between Southern and Hancock Whitney

Given the investment horizon of 90 days Southern Co is expected to under-perform the Hancock Whitney. But the stock apears to be less risky and, when comparing its historical volatility, Southern Co is 1.32 times less risky than Hancock Whitney. The stock trades about -0.21 of its potential returns per unit of risk. The Hancock Whitney is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,457  in Hancock Whitney on September 18, 2024 and sell it today you would lose (7.00) from holding Hancock Whitney or give up 0.28% of portfolio value over 90 days.

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

Southern Co  vs.  Hancock Whitney

Southern

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hancock Whitney

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hancock Whitney has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Hancock Whitney is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Southern and Hancock Whitney

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

The idea behind Southern Co and Hancock Whitney 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.