Correlation Between Banner and Ameris Bancorp

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

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

Diversification Opportunities for Banner and Ameris Bancorp

0.92

Correlation Coefficient

Banner  Ameris Bancorp

Almost no diversification

The 3 months correlation between Banner and Ameris is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Banner and Ameris Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameris Bancorp and Banner 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 Banner are associated (or correlated) with Ameris Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameris Bancorp has no effect on the direction of Banner i.e., Banner and Ameris Bancorp go up and down completely randomly.

Pair Corralation between Banner and Ameris Bancorp

Given the investment horizon of 90 days Banner is expected to generate 0.94 times more return on investment than Ameris Bancorp. However, Banner is 1.07 times less risky than Ameris Bancorp. It trades about 0.0 of its potential returns per unit of risk. Ameris Bancorp is currently generating about -0.07 per unit of risk. If you would invest  6,535  in Banner on December 20, 2024 and sell it today you would lose (39.00) from holding Banner or give up 0.6% of portfolio value over 90 days.

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

Banner  vs.  Ameris Bancorp

Banner

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banner has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Banner is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Ameris Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ameris Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Banner and Ameris Bancorp

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

The idea behind Banner and Ameris 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.