Correlation Between ST Bancorp and Trustmark

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

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

Diversification Opportunities for ST Bancorp and Trustmark

0.7

Correlation Coefficient

ST Bancorp  Trustmark

Poor diversification

The 3 months correlation between STBA and Trustmark is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ST Bancorp and Trustmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustmark and ST Bancorp 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 ST Bancorp 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 ST Bancorp i.e., ST Bancorp and Trustmark go up and down completely randomly.

Pair Corralation between ST Bancorp and Trustmark

Given the investment horizon of 90 days ST Bancorp is expected to generate 4.17 times less return on investment than Trustmark. In addition to that, ST Bancorp is 1.08 times more volatile than Trustmark. It trades about 0.03 of its total potential returns per unit of risk. Trustmark is currently generating about 0.14 per unit of volatility. If you would invest  3,469  in Trustmark on May 21, 2025 and sell it today you would earn a total of  387.00  from holding Trustmark or generate 11.16% return on investment over 90 days.

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

ST Bancorp  vs.  Trustmark

ST Bancorp

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in ST Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, ST Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Trustmark

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Trustmark are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, Trustmark may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ST Bancorp and Trustmark

The main advantage of trading using opposite ST Bancorp and Trustmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ST Bancorp 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 ST Bancorp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.