Correlation Between Bank Central and Southern

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

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

Diversification Opportunities for Bank Central and Southern

-0.85

Correlation Coefficient

Bank Central  Southern

Pay attention - limited upside

The 3 months correlation between Bank and Southern is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Southern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern and Bank Central 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 Bank Central Asia 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 Bank Central i.e., Bank Central and Southern go up and down completely randomly.

Pair Corralation between Bank Central and Southern

Assuming the 90 days horizon Bank Central Asia is expected to under-perform the Southern. In addition to that, Bank Central is 2.42 times more volatile than Southern Co. It trades about -0.12 of its total potential returns per unit of risk. Southern Co is currently generating about 0.2 per unit of volatility. If you would invest  2,109  in Southern Co on May 4, 2025 and sell it today you would earn a total of  148.00  from holding Southern Co or generate 7.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Bank Central Asia  vs.  Southern Co

Bank Central Asia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Central Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Southern

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Southern Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward-looking indicators, Southern may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Bank Central and Southern

The main advantage of trading using opposite Bank Central and Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central 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 Bank Central Asia 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.