Correlation Between Tri-County Financial and Southeastern Banking

Can any of the company-specific risk be diversified away by investing in both Tri-County Financial and Southeastern Banking 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 Tri-County Financial and Southeastern Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tri County Financial Group and Southeastern Banking Corp, you can compare the effects of market volatilities on Tri-County Financial and Southeastern Banking 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 Tri-County Financial with a short position of Southeastern Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri-County Financial and Southeastern Banking.

Diversification Opportunities for Tri-County Financial and Southeastern Banking

0.76

Correlation Coefficient

Tri-County Financial  Southeastern Banking

Poor diversification

The 3 months correlation between Tri-County and Southeastern is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tri County Financial Group and Southeastern Banking Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southeastern Banking Corp and Tri-County Financial 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 Tri County Financial Group are associated (or correlated) with Southeastern Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southeastern Banking Corp has no effect on the direction of Tri-County Financial i.e., Tri-County Financial and Southeastern Banking go up and down completely randomly.

Pair Corralation between Tri-County Financial and Southeastern Banking

Given the investment horizon of 90 days Tri County Financial Group is expected to generate 0.35 times more return on investment than Southeastern Banking. However, Tri County Financial Group is 2.87 times less risky than Southeastern Banking. It trades about 0.14 of its potential returns per unit of risk. Southeastern Banking Corp is currently generating about 0.04 per unit of risk. If you would invest  4,325  in Tri County Financial Group on May 7, 2025 and sell it today you would earn a total of  175.00  from holding Tri County Financial Group or generate 4.05% return on investment over 90 days.

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

Tri County Financial Group  vs.  Southeastern Banking Corp

Tri County Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tri County Financial Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Tri-County Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Southeastern Banking Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Southeastern Banking Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Southeastern Banking is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Tri-County Financial and Southeastern Banking

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

The idea behind Tri County Financial Group and Southeastern Banking Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.