Correlation Between Exchange Bankshares and Southern

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

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

Diversification Opportunities for Exchange Bankshares and Southern

0.23

Correlation Coefficient

Exchange Bankshares  Southern

Modest diversification

The 3 months correlation between Exchange and Southern is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Bankshares and Southern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern and Exchange Bankshares 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 Exchange Bankshares are associated (or correlated) with Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern has no effect on the direction of Exchange Bankshares i.e., Exchange Bankshares and Southern go up and down completely randomly.

Pair Corralation between Exchange Bankshares and Southern

Given the investment horizon of 90 days Exchange Bankshares is expected to generate 2.25 times more return on investment than Southern. However, Exchange Bankshares is 2.25 times more volatile than Southern Co. It trades about 0.21 of its potential returns per unit of risk. Southern Co is currently generating about 0.13 per unit of risk. If you would invest  5,013  in Exchange Bankshares on July 25, 2025 and sell it today you would earn a total of  987.00  from holding Exchange Bankshares or generate 19.69% return on investment over 90 days.

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

Exchange Bankshares  vs.  Southern Co

Exchange Bankshares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Bankshares are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Exchange Bankshares demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Southern

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Southern Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking indicators, Southern is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Exchange Bankshares and Southern

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

The idea behind Exchange Bankshares and Southern Co 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.