Correlation Between Great Southern and CVB Financial

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Great Southern and CVB Financial 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 Great Southern and CVB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Southern Bancorp and CVB Financial, you can compare the effects of market volatilities on Great Southern and CVB Financial 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 Great Southern with a short position of CVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Southern and CVB Financial.

Diversification Opportunities for Great Southern and CVB Financial

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Great and CVB is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Great Southern Bancorp and CVB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB Financial and Great 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 Great Southern Bancorp are associated (or correlated) with CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial has no effect on the direction of Great Southern i.e., Great Southern and CVB Financial go up and down completely randomly.

Pair Corralation between Great Southern and CVB Financial

Given the investment horizon of 90 days Great Southern Bancorp is expected to generate 0.92 times more return on investment than CVB Financial. However, Great Southern Bancorp is 1.09 times less risky than CVB Financial. It trades about -0.08 of its potential returns per unit of risk. CVB Financial is currently generating about -0.14 per unit of risk. If you would invest  6,364  in Great Southern Bancorp on November 29, 2024 and sell it today you would lose (501.00) from holding Great Southern Bancorp or give up 7.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Great Southern Bancorp  vs.  CVB Financial

 Performance 
       Timeline  
Great Southern Bancorp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Great Southern Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
CVB Financial 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CVB Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Great Southern and CVB Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Great Southern and CVB Financial

The main advantage of trading using opposite Great Southern and CVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Southern position performs unexpectedly, CVB Financial 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 CVB Financial will offset losses from the drop in CVB Financial's long position.
The idea behind Great Southern Bancorp and CVB Financial 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.
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Bonds Directory
Find actively traded corporate debentures issued by US companies
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Insider Screener
Find insiders across different sectors to evaluate their impact on performance