Correlation Between Washington Federal and Southside Bancshares,

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

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

Diversification Opportunities for Washington Federal and Southside Bancshares,

0.91

Correlation Coefficient

Washington Federal  Southside Bancshares,

Almost no diversification

The 3 months correlation between Washington and Southside is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and Southside Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southside Bancshares, and Washington Federal 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 Washington Federal are associated (or correlated) with Southside Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southside Bancshares, has no effect on the direction of Washington Federal i.e., Washington Federal and Southside Bancshares, go up and down completely randomly.

Pair Corralation between Washington Federal and Southside Bancshares,

Given the investment horizon of 90 days Washington Federal is expected to under-perform the Southside Bancshares,. But the stock apears to be less risky and, when comparing its historical volatility, Washington Federal is 1.02 times less risky than Southside Bancshares,. The stock trades about -0.02 of its potential returns per unit of risk. The Southside Bancshares, is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,343  in Southside Bancshares, on September 28, 2024 and sell it today you would lose (114.00) from holding Southside Bancshares, or give up 3.41% of portfolio value over 90 days.

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

Washington Federal  vs.  Southside Bancshares,

Washington Federal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Washington Federal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Washington Federal is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Washington Federal and Southside Bancshares,

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

The idea behind Washington Federal and Southside Bancshares, 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.