Correlation Between Midland States and SmartFinancial,

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

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

Diversification Opportunities for Midland States and SmartFinancial,

0.96

Correlation Coefficient

Midland States  SmartFinancial,

Almost no diversification

The 3 months correlation between Midland and SmartFinancial, is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Midland States Bancorp and SmartFinancial, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartFinancial, and Midland States 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 Midland States Bancorp are associated (or correlated) with SmartFinancial,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartFinancial, has no effect on the direction of Midland States i.e., Midland States and SmartFinancial, go up and down completely randomly.

Pair Corralation between Midland States and SmartFinancial,

Given the investment horizon of 90 days Midland States is expected to generate 1.23 times less return on investment than SmartFinancial,. In addition to that, Midland States is 1.09 times more volatile than SmartFinancial,. It trades about 0.14 of its total potential returns per unit of risk. SmartFinancial, is currently generating about 0.19 per unit of volatility. If you would invest  2,917  in SmartFinancial, on August 30, 2024 and sell it today you would earn a total of  744.00  from holding SmartFinancial, or generate 25.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Midland States Bancorp  vs.  SmartFinancial,

Midland States Bancorp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Midland States Bancorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental drivers, Midland States demonstrated solid returns over the last few months and may actually be approaching a breakup point.

SmartFinancial,

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SmartFinancial, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, SmartFinancial, disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Midland States and SmartFinancial,

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

The idea behind Midland States Bancorp and SmartFinancial, 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.