Correlation Between Primis Financial and Bank of South
Can any of the company-specific risk be diversified away by investing in both Primis Financial and Bank of South 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 Primis Financial and Bank of South into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primis Financial Corp and Bank of South, you can compare the effects of market volatilities on Primis Financial and Bank of South 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 Primis Financial with a short position of Bank of South. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primis Financial and Bank of South.
Diversification Opportunities for Primis Financial and Bank of South
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Primis and Bank is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Primis Financial Corp and Bank of South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of South and Primis Financial 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 Primis Financial Corp are associated (or correlated) with Bank of South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of South has no effect on the direction of Primis Financial i.e., Primis Financial and Bank of South go up and down completely randomly.
Pair Corralation between Primis Financial and Bank of South
Given the investment horizon of 90 days Primis Financial Corp is expected to generate 1.35 times more return on investment than Bank of South. However, Primis Financial is 1.35 times more volatile than Bank of South. It trades about 0.02 of its potential returns per unit of risk. Bank of South is currently generating about -0.03 per unit of risk. If you would invest 1,093 in Primis Financial Corp on September 6, 2024 and sell it today you would earn a total of 153.00 from holding Primis Financial Corp or generate 14.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 30.3% |
Values | Daily Returns |
Primis Financial Corp vs. Bank of South
Performance |
Timeline |
Primis Financial Corp |
Bank of South |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Primis Financial and Bank of South Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Primis Financial and Bank of South
The main advantage of trading using opposite Primis Financial and Bank of South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primis Financial position performs unexpectedly, Bank of South 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 Bank of South will offset losses from the drop in Bank of South's long position.Primis Financial vs. Affinity Bancshares | Primis Financial vs. Home Federal Bancorp | Primis Financial vs. Community West Bancshares | Primis Financial vs. Investar Holding Corp |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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