Correlation Between SB Financial and Southern Missouri

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

Diversification Opportunities for SB Financial and Southern Missouri

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between SBFG and Southern is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SB Financial Group and Southern Missouri Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Missouri Bancorp and SB 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 SB Financial Group are associated (or correlated) with Southern Missouri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Missouri Bancorp has no effect on the direction of SB Financial i.e., SB Financial and Southern Missouri go up and down completely randomly.

Pair Corralation between SB Financial and Southern Missouri

Given the investment horizon of 90 days SB Financial Group is expected to generate 0.96 times more return on investment than Southern Missouri. However, SB Financial Group is 1.04 times less risky than Southern Missouri. It trades about 0.03 of its potential returns per unit of risk. Southern Missouri Bancorp is currently generating about 0.03 per unit of risk. If you would invest  1,552  in SB Financial Group on October 18, 2024 and sell it today you would earn a total of  466.00  from holding SB Financial Group or generate 30.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.6%
ValuesDaily Returns

SB Financial Group  vs.  Southern Missouri Bancorp

 Performance 
       Timeline  
SB Financial Group 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in SB Financial Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, SB Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
Southern Missouri Bancorp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Southern Missouri Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Southern Missouri is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SB Financial and Southern Missouri Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SB Financial and Southern Missouri

The main advantage of trading using opposite SB Financial and Southern Missouri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SB Financial position performs unexpectedly, Southern Missouri 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 Southern Missouri will offset losses from the drop in Southern Missouri's long position.
The idea behind SB Financial Group and Southern Missouri 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.
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

Other Complementary Tools

Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Fundamental Analysis
View fundamental data based on most recent published financial statements