Correlation Between SouthState and Luther Burbank

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

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

Diversification Opportunities for SouthState and Luther Burbank

0.0

Correlation Coefficient

SouthState  Luther Burbank

Pay attention - limited upside

The 3 months correlation between SouthState and Luther is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SouthState and Luther Burbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luther Burbank and SouthState 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 SouthState are associated (or correlated) with Luther Burbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luther Burbank has no effect on the direction of SouthState i.e., SouthState and Luther Burbank go up and down completely randomly.

Pair Corralation between SouthState and Luther Burbank

If you would invest (100.00) in Luther Burbank on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Luther Burbank or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SouthState  vs.  Luther Burbank

SouthState

Risk-Adjusted Performance

Very Weak

Over the last 90 days SouthState has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SouthState is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Luther Burbank

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SouthState and Luther Burbank

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

The idea behind SouthState and Luther Burbank 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.