Correlation Between Great Southern and First Of

Can any of the company-specific risk be diversified away by investing in both Great Southern and First Of 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 First Of 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 First of Long, you can compare the effects of market volatilities on Great Southern and First Of 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 First Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Southern and First Of.

Diversification Opportunities for Great Southern and First Of

0.6

Correlation Coefficient

Great Southern  First Of

Poor diversification

The 3 months correlation between Great and First is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Great Southern Bancorp and First of Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First of Long 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 First Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First of Long has no effect on the direction of Great Southern i.e., Great Southern and First Of go up and down completely randomly.

Pair Corralation between Great Southern and First Of

Given the investment horizon of 90 days Great Southern Bancorp is expected to generate 0.88 times more return on investment than First Of. However, Great Southern Bancorp is 1.14 times less risky than First Of. It trades about 0.03 of its potential returns per unit of risk. First of Long is currently generating about 0.02 per unit of risk. If you would invest  5,025  in Great Southern Bancorp on December 2, 2024 and sell it today you would earn a total of  876.00  from holding Great Southern Bancorp or generate 17.43% return on investment over 90 days.

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

Great Southern Bancorp  vs.  First of Long

Great Southern Bancorp

Risk-Adjusted Performance

Very Weak

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.

First of Long

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Great Southern and First Of

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

The idea behind Great Southern Bancorp and First of Long 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.