Correlation Between Renasant and Independent Bank

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

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

Diversification Opportunities for Renasant and Independent Bank

0.32

Correlation Coefficient

Renasant  Independent Bank

Weak diversification

The 3 months correlation between Renasant and Independent is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Renasant and Independent Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independent Bank and Renasant 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 Renasant are associated (or correlated) with Independent Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independent Bank has no effect on the direction of Renasant i.e., Renasant and Independent Bank go up and down completely randomly.

Pair Corralation between Renasant and Independent Bank

Given the investment horizon of 90 days Renasant is expected to under-perform the Independent Bank. But the stock apears to be less risky and, when comparing its historical volatility, Renasant is 1.09 times less risky than Independent Bank. The stock trades about -0.04 of its potential returns per unit of risk. The Independent Bank is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,927  in Independent Bank on September 9, 2025 and sell it today you would earn a total of  437.00  from holding Independent Bank or generate 6.31% return on investment over 90 days.

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

Renasant  vs.  Independent Bank

Renasant

Risk-Adjusted Performance

Weakest

Over the last 90 days Renasant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Renasant is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Independent Bank

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Independent Bank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental indicators, Independent Bank may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with Renasant and Independent Bank

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

The idea behind Renasant and Independent Bank 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.