Correlation Between 1st Source and Trustmark

Can any of the company-specific risk be diversified away by investing in both 1st Source and Trustmark 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 1st Source and Trustmark into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1st Source and Trustmark, you can compare the effects of market volatilities on 1st Source and Trustmark 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 1st Source with a short position of Trustmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1st Source and Trustmark.

Diversification Opportunities for 1st Source and Trustmark

0.78

Correlation Coefficient

1st Source  Trustmark

Poor diversification

The 3 months correlation between 1st and Trustmark is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding 1st Source and Trustmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustmark and 1st Source 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 1st Source are associated (or correlated) with Trustmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustmark has no effect on the direction of 1st Source i.e., 1st Source and Trustmark go up and down completely randomly.

Pair Corralation between 1st Source and Trustmark

Given the investment horizon of 90 days 1st Source is expected to under-perform the Trustmark. In addition to that, 1st Source is 1.1 times more volatile than Trustmark. It trades about -0.01 of its total potential returns per unit of risk. Trustmark is currently generating about 0.1 per unit of volatility. If you would invest  3,427  in Trustmark on May 6, 2025 and sell it today you would earn a total of  262.00  from holding Trustmark or generate 7.65% return on investment over 90 days.

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

1st Source  vs.  Trustmark

1st Source

Risk-Adjusted Performance

Very Weak

Over the last 90 days 1st Source has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, 1st Source is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Trustmark

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trustmark are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain primary indicators, Trustmark may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with 1st Source and Trustmark

The main advantage of trading using opposite 1st Source and Trustmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1st Source position performs unexpectedly, Trustmark 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 Trustmark will offset losses from the drop in Trustmark's long position.

The idea behind 1st Source and Trustmark 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.